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63–079 2011

ENERGY TAX INCENTIVES DRIVING 

THE GREEN JOB ECONOMY 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

APRIL 14, 2010

Serial No. 111–47 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

SANDER M. LEVIN, MICHIGAN, Acting Chairman 

CHARLES B. RANGEL, NEW YORK 

FORTNEY PETE STARK, CALIFORNIA 

JIM MCDERMOTT, WASHINGTON 

JOHN LEWIS, GEORGIA 

RICHARD E. NEAL, MASSACHUSETTS 

JOHN S. TANNER, TENNESSEE 

XAVIER BECERRA, CALIFORNIA 

LLOYD DOGGETT, TEXAS 

EARL POMEROY, NORTH DAKOTA 

MIKE THOMPSON, CALIFORNIA 

JOHN B. LARSON, CONNECTICUT 

EARL BLUMENAUER, OREGON 

RON KIND, WISCONSIN 

BILL PASCRELL, JR., NEW JERSEY 

SHELLEY BERKLEY, NEVADA 

JOSEPH CROWLEY, NEW YORK 

CHRIS VAN HOLLEN, MARYLAND 

KENDRICK B. MEEK, FLORIDA 

ALLYSON Y. SCHWARTZ, PENNSYLVANIA 

ARTUR DAVIS, ALABAMA 

DANNY K. DAVIS, ILLINOIS 

BOB ETHERIDGE, NORTH CAROLINA 

LINDA T. SA ́ NCHEZ, CALIFORNIA 

BRIAN HIGGINS, NEW YORK 

JOHN A. YARMUTH, KENTUCKY 

DAVE CAMP, MICHIGAN 

WALLY HERGER, CALIFORNIA 

SAM JOHNSON, TEXAS 

KEVIN BRADY, TEXAS 

PAUL RYAN, WISCONSIN 

ERIC CANTOR, VIRGINIA 

JOHN LINDER, GEORGIA 

DEVIN NUNES, CALIFORNIA 

PATRICK J. TIBERI, OHIO 

GINNY BROWN-WAITE, FLORIDA 

GEOFF DAVIS, KENTUCKY 

DAVID G. REICHERT, WASHINGTON 

CHARLES W. BOUSTANY, JR., LOUISIANA 

DEAN HELLER, NEVADA 

PETER J. ROSKAM, ILLINOIS 

JANICE MAYS, Chief Counsel and Staff Director 

JON TRAUB, Minority Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

April 14, 2010 

Page 

Advisory of April 7, 2010 announcing the hearing ............................................... 2 

WITNESSES 

The Honorable Michael Mundaca, Assistant Secretary for Tax Policy, United 

States Department of the Treasury .................................................................... 7 

Matt Rogers, Senior Advisor to the Secretary, United States Department 

of Energy ............................................................................................................... 37 

T. Boone Pickens, Chairman, BP Capital .............................................................. 96 

Victor Abate, Vice President of Renewables, General Electric ............................ 110 

Jeffrey Sachs, Ph.D., Director, The Earth Institute, Columbia University ........ 122 

Joseph Romm, Ph.D., Senior Fellow, Center for American Progress .................. 130 

The Honorable Karen Harbert, President and Chief Executive Officer, Institute for 21st Century Energy, U.S. Chamber of Commerce ............................. 149 

Stephanie Burns Ph.D., Chairman, President and Chief Executive Officer, 

Dow Corning ......................................................................................................... 186 

The Honorable Reed Hundt, Chief Executive Officer, Coalition for Green 

Capital ................................................................................................................... 190 

The Honorable Rod Dole, Auditor, Controller, Treasury, and Tax Collector, 

Sonoma County, California ................................................................................. 205 

Mark Bolinger, Research Scientist, Lawrence Berkeley National Laboratory ... 210 

The Honorable David Bohigian, Managing Partner, E2 Capital Partners ......... 215 

SUBMISSIONS FOR THE RECORD 

American Forest & Paper Association, statement ................................................ 235 

AG Resources, LLC, letter ...................................................................................... 240 

Alan P. Langford, letter .......................................................................................... 242 

American Biogas Council, letter ............................................................................. 243 

American Farm Bureau Federation, statement .................................................... 244 

American Meat Institute, letter ............................................................................. 246 

American Public Power Association, statement .................................................... 248 

American Wind Energy Association, statement .................................................... 251 

AO Smith, statement ............................................................................................... 256 

Associated Builders and Contractors Green, letter .............................................. 259 

Bechtel Power Corporation, statement .................................................................. 263 

Biotechnology Industry Organization, statement ................................................. 264 

BullDog BioDiesel, LLC, letter ............................................................................... 269 

Capstone Turbine, letter ......................................................................................... 270 

Climate Energy, LLC, statement ........................................................................... 276 

Coal Utilization Research Council, statement ...................................................... 278 

Continental Resources, Inc., statement ................................................................. 283 

Domtar Corporation, statement .............................................................................. 291 

EC Oregon, statement ............................................................................................. 293 

Edison Electric Institute, statement ...................................................................... 297 

Electric Drive Transportation Association, statement .......................................... 301 

Encana Natural Gas, letter ..................................................................................... 304 

Environmental Working Group, statement ........................................................... 306 

Excelsior Energy Inc., letter ................................................................................... 312 

FloDesign Wind Turbine Corp., statement ............................................................ 317 

Friends of the Earth (FOE), statement .................................................................. 319 

Geothermal Energy Association, letter .................................................................. 328 

Griffith Ulum, statement ........................................................................................ 330 

Growth Energy, statement ...................................................................................... 333 

Historic Tax Credit Coalition, statement .............................................................. 338 

The Honorable Betsy Markey, statement .............................................................. 344 


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iv 

The Honorable Erik Paulsen, letter ....................................................................... 345 

Independent Petroleum Association of America, statement ................................ 347 

James Sebesta, letter .............................................................................................. 363 

Large Public Power Council, statement ................................................................. 364 

Marathon Engine Systems, statement ................................................................... 368 

Michael R. Splinter, statement ............................................................................... 372 

National Commission on Energy Policy, letter ..................................................... 375 

Nuclear Energy Institute, statement ..................................................................... 384 

Natural Resources Defense Council, letter ............................................................ 389 

National Alliance of Forest Owners, statement .................................................... 393 

National Association of Home Builders, statement .............................................. 399 

National Association of Real Estate Investment Trusts, statement ................... 406 

National Biodiesel Board, statement ..................................................................... 415 

National Hydropower Association, letter ............................................................... 420 

National Roofing Contractors Association, statement .......................................... 423 

National Rural Electric Cooperative Association, statement ............................... 427 

Nature’s Fuel, letter ................................................................................................ 434 

Northeast Combined Heat and Power Initiative, letter ....................................... 435 

Northwest Pipe Company for Northwest PowerPipe, letter ................................. 437 

Orion Advocates on behalf of Domtar Corporation, statement ............................ 439 

Paper Industry Coalition to Save Energy and Main Street Jobs, statement ..... 440 

Plug Power Inc., Latham, New York, statement .................................................. 443 

Plumbers and Pipefitters Local Union #589, statement ....................................... 446 

Polyisocyanurate Insulation Manufacturers Association, statement .................. 450 

Puget Sound Energy, letter ..................................................................................... 454 

Real Estate Roundtable, statement ........................................................................ 456 

Renewable Energy Group, letter ............................................................................ 460 

Renewable Fuels Association, statement ............................................................... 462 

Semiconductor Equipment and Materials International (SEMI), statement ...... 470 

Solar Energy Industries Association, statement ................................................... 472 

U.S. Green Building Council, statement ............................................................... 481 

U.S. Fuel Cell Council, statement .......................................................................... 487 

United Solar Ovonic, LLC, a subsidiary of Energy Conversion Devices, Inc., 

statement .............................................................................................................. 489 

Windustry, letter ..................................................................................................... 493 


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ENERGY TAX INCENTIVES DRIVING THE 

GREEN JOB ECONOMY 

WEDNESDAY, APRIL 14, 2010 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:05 a.m., in Room 

1100, Longworth House Office Building, Hon. Sander M. Levin 

(Chairman of the Committee) presiding. 

[The advisory announcing of the hearing follows:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

Chairman Levin Announces Hearing on Energy 

Tax Incentives Driving the Green Job Economy 

House Ways and Means Committee Chairman Sander M. Levin today announced 

that the Committee on Ways and Means will hold a hearing on energy tax incentives and the green job economy. The hearing will take place on Wednesday, 

April 14, 2010, in 1100 Longworth House Office Building, beginning at 

10:00 a.m. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. A 

list of invited witnesses will follow. 

BACKGROUND: 

Over the last several years, the Nation has benefited from an unprecedented 

amount of both public and private investment in renewable electricity production, 

energy efficiency, and renewable fuels, ushering in the new, green economy as a 

driver for sustainable job creation. A significant amount of Federal support for investment in renewable energy and energy efficiency is provided through the Internal 

Revenue Code. Within the span of 5 months during the Winter of 2008 and 2009, 

the Congress passed and the President signed into law approximately $39 billion 

in provisions to stimulate demand for renewable electricity and renewable fuels, 

provide assistance to communities to make investments in energy efficiency, and assist domestic manufacturers engaged in the production of advanced energy equipment. These investments include approximately $17 billion in incentives provided 

in the Energy Improvement and Extension Act of 2008 (Division B of P.L. 110–343) 

and approximately $22 billion in incentives provided in the American Recovery and 

Reinvestment Act of 2009 (P.L. 111–5). 

In announcing this hearing, Chairman Levin said, ‘‘Investing in energy efficiency and renewable energy has major potential to create new jobs and 

help our economy recover. In recent years we have made significant investments in policies to encourage and enhance domestic manufacturing and 

production of renewable energy as well as the use of more efficient fuel 

sources. This hearing will examine benefits currently in place and discuss 

potential for new incentives to further drive job creation, economic 

growth, and reduce our dependence on foreign oil.’’ 

FOCUS OF THE HEARING: 

The hearing will examine the effectiveness of current energy tax policy and identify additional steps that the Committee can take to ensure continued job growth 

in this area while at the same time advancing national energy policy focus on a discussion of current and proposed energy tax incentives. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://democrats.waysandmeans.house.gov, select ‘‘Hearings’’. Select the hearing for 


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which you would like to submit, and click on the link entitled, ‘‘Click here to provide 

a submission for the record.’’ Once you have followed the online instructions, submit 

all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of 

business Wednesday, April 28, 2010. Finally, please note that due to the change 

in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries 

to all House Office Buildings. For questions, or if you encounter technical problems, 

please call (202) 225–1721 or (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://democrats.waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

Chairman LEVIN. The Committee will come to order. I will give 

my opening statement, and then Mr. Camp, the Ranking Member, 

will give his and then we proceed with the witnesses. 

I think all of you know we have a full day scheduled, with three 

panels. The contemplation is that we will proceed with the first 

panel, and all of us will ask our questions. And then the thought 

was we might have a brief break before the second and the third 

panel. 

So, there is a Ways and Means bill up today, probably around 

1:00, and that may affect the participation of some of the Members. 

So, we will proceed on that basis with my opening statement, and 

then, Mr. Camp, with yours. 

The Ways and Means Committee is aggressively engaged in advancing legislation that will support business expansion and create 

new jobs here in the United States. In the past 2 months, the Committee has advanced two separate bills to encourage businesses to 

hire new employees, provide tax relief to small businesses so they 

can grow and expand and assist local communities, finance infrastructure improvements that support local community jobs. 


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Today, the Committee will examine ways that the Federal Government can help boost the green jobs economy. Consider all that 

is at stake: cutting edge technologies of the future, manufacturing 

capacity to build these advanced technology products, lower energy 

costs for families and businesses, reducing our dependence on foreign oil, preserving the environment for future generations. 

The upside potential for our country is immense. But it will not 

happen automatically. Unfortunately, while some progress has 

been made in recent years, our country, in this area, is playing 

catch-up. We have lacked an energy policy for changing times and 

changing technologies. We have been behind the curve. And we 

have been handicapped by those who feel it should be done only by 

the private sector. 

The governments of other countries have not taken this view, 

and they are racing ahead to dominate in this area. While we need 

a different partnership than those adopted by others, an American 

partnership, the wrong answer has been that there should be no 

partnership at all. 

Take, for example, the electric vehicle GM is going to bring to 

market on schedule. But initially, the battery packs are being supplied from South Korea. Why? In part, because for years the South 

Korean government had a strategy to financially support this technology and its local industry. We are on the cusp of changing that 

because of private sector investment and accelerated public support 

for battery development. 

A recent paper from the National Foreign Trade Council says— 

and I quote—‘‘Chinese planners have indicated their intention, that 

eventually most or all of the renewable energy equipment installed 

in China will be made in China. China has emerged as a world 

leader in the manufacture of photovoltaic technology, and could become the world’s leading exporter of wind turbines.’’ 

Last year, the Recovery Act took important steps in boosting consumer demand and investing in advance technology, through 

grants and tax incentives for businesses, individuals, and communities. We made the green jobs economy a priority, and our actions 

are having an impact. 

The combination of the Recovery Act and the 2008 energy tax 

package provided long-term extensions of our main incentives producing electricity from wind, solar, and other renewable sources. 

We made these incentives work better by providing a direct payment option. 

The Energy Information Administration estimated that the Recovery Act will result in twice as much electricity generated from 

wind than would have been produced without the policies included 

in the Act. Over the next 6 years, the EIA projected that residential tax credits for solar equipment will encourage more than 1.6 

million solar units to be installed nationwide. 

Tax credits for plug-in electric vehicles are expected to bring 

90,000 vehicles to market in the year 2015, alone. However, we 

cannot rest. In particular, it is important to identify ways that we 

can build on these efforts. In particular, although we are making 

strides in generating long-term demand for green technology, we 

have significant work to do to make certain this demand is satisfied with goods produced in our country. 


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Today we will hear testimony that the U.S. wind turbine manufacturing industry is not currently capable of supplying 100 percent 

of the wind power capacity that would be constructed with the support of Recovery Act programs. While jobs are created when we 

construct a solar facility, still more jobs are created when the components that are used in that facility are manufactured here, in the 

United States. 

If we are not aggressive about expanding our green manufacturing capacity, these manufacturing jobs will be created overseas, 

and the U.S. will become more reliant on products that are produced outside of our borders. 

The U.S. took a good first step toward supporting domestic manufacturing in the Recovery Act when we provided 2.3 billion of allocated investment tax credits for manufacturers that established, 

equipped, and expand domestic manufacturing facilities to produce 

advanced energy equipment. 

Demand in this area far exceeded its allocation. U.S. businesses 

put forward three times, or over 8.1 billion, of investment tax credit plans under this program. The Administration has proposed an 

additional $5 billion of these tax credits for a new round of competitive awards. 

What’s at stake is clear: good jobs, advanced technology, low energy costs, national security, and a cleaner environment. What we 

need to make crystal clear is that the government is a full, active, 

and effective partner in achieving that end. 

I hope that we can proceed here today and beyond on a bipartisan basis to achieve these goals. There are a number of proposals 

for renewable energy incentives before the Committee that have bipartisan support. And I hope, very much so, that we can translate 

that into bipartisan action because action is what is so clearly 

needed today and for the future of this country. 

I now yield to the Ranking Member, Mr. Camp. 

Mr. CAMP. Well, thank you very much, Mr. Chairman. Clean, 

renewable energy is something everyone on this Committee supports. And I wouldn’t be surprised if, at one time or another, most 

every Member of the committee has signed on to or voted for legislation to incentivize the production, purchase, and use of alternative fuels. It has been and remains an issue about our National 

security, our environment, and our economy. 

And, clearly, we need to reduce our dependance on foreign oil. 

We should continue to utilize new technologies to ensure a clean, 

safe environment for future generations. And given that the unemployment rate appears to be stuck pretty close to 10 percent, despite the President’s promises about the stimulus bill, we clearly 

need more jobs. 

However, we should be realistic about the current status of and 

prospects for the so-called green economy and green energy. Over 

recent years, policy-makers at Federal, state, and local levels have 

significantly stepped up efforts to subsidize renewable energy 

through the Tax Code. And, despite this investment as the chart 

on the screen makes clear, the overwhelming majority of America’s 

energy consumption continues to be sourced from fossil fuels. 

In fact, petroleum, coal, and natural gas supplied 85 percent of 

America’s energy demand in 2007, with nuclear supplying 8 perVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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cent. Renewable energy sources supplied only 7 percent, virtually 

unchanged from 2000. Even after a Federal investment of nearly 

$40 billion in new tax subsidies for renewables as part of legislation enacted in October of 2008, and as part of the February 2009 

stimulus package, these relative shares remained about the same 

in 2009. 

So, as the chart on the screen shows, in 2009 83 percent of our 

energy came from fossil fuels, 9 percent from nuclear, and 8 percent from renewables. And as one executive told me, ‘‘You can’t run 

an alternative energy manufacturing plant on wind and solar energy.’’ 

Again, how reliant our families and jobs are on traditional 

sources of energy, given that situation, I am further discouraged by 

the Administration’s proposed tax increases on the oil and gas and 

coal industries. President Obama’s 2011 budget proposal would impose an estimated $40.7 billion in punitive new taxes on domestic 

energy production by America’s oil and gas and coal companies. 

Most of the proposals targeting oil and gas were also proposed in 

last year’s administration budget. 

The coal proposals, however, are new. And among many others, 

these include repealing the section 199 domestic manufacturing deduction for oil and natural gas companies, raising $14.8 billion over 

10 years, repealing expensing of intangible drilling costs, raising 

10.9 billion, increasing the amortization period for geological and 

geophysical costs of independent producers from 2 to 7 years, raising $1 billion, and repealing the section 199 domestic manufacturing deduction for coal and hard mineral fossil fuels, raising $2.1 

billion. 

Additionally, the President’s 2011 budget contains several other 

revenue raisers. Repealing the last and first out, or LIFO, accounting method raises $75.3 billion, modifying rules for dual capacity 

taxpayers, raising $8.2 billion, and reinstating superfund excise 

taxes and corporate environmental income taxes, raising $19.2 billion. That would have a significant effect on energy businesses, including oil and gas production. 

Simply put, it takes today’s energy to power tomorrow’s technology. And these tax increases are dwarfed by the nearly $900 billion national energy tax that the majority calls cap and trade. 

I should note that this bill has gone nowhere in the Senate. Its 

prospects for revival are, thankfully, not very good. So, while the 

focus of this hearing may be on the energy of tomorrow and the tax 

incentives to encourage its development—and I look forward to 

hearing that testimony—I would strongly urge my colleagues to 

keep in mind the tax increases that will be imposed on the energy 

of today to meet the majority’s rules are unacceptable. You cannot 

increase the cost of producing 85 percent of the energy being used 

today and expect consumers or employers to benefit from tax incentives that are going to less than 10 percent of the energy being 

used today. The math just doesn’t add up. 

So, with that, I yield back the balance of my time. I look forward 

to hearing from our witnesses today. Thank you very much. 

Chairman LEVIN. Thank you, Mr. Camp. All right. Our first 

panel, two very distinguished gentlemen: the Honorable Michael 

Mundaca, who is the Assistant Secretary for Tax Policy at the 


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Treasury Department—welcome, Mr. Mundaca; and Matt Rogers, 

who is a senior advisor to the Secretary, U.S. Department of Energy. 

Your full statements will be entered into the record. And so, why 

don’t you proceed for 5 minutes or so, as you wish. You can follow 

exactly what’s in your testimony or, if you want to, summarize it 

and perhaps highlight certain points. 

So, we will start off with you, Secretary Mundaca. Thank you for 

joining us. 

STATEMENT OF MICHAEL MUNDACA, ASSISTANT SECRETARY 

FOR TAX POLICY, UNITED STATES DEPARTMENT OF THE 

TREASURY 

Mr. MUNDACA. Thank you. Good morning, Chairman Levin, 

Ranking Member Camp, and Members of the Committee. Thank 

you for inviting me to testify today. I am going to focus my oral 

remarks on the energy proposals and the President’s fiscal year 

2011 budget. 

First, I will briefly discuss the Administration’s overall environmental and energy policy, in order to provide some context for the 

energy proposals in the budget. The Administration believes that 

our Nation must build a new, clean energy economy, curb our dependence on fossil fuels, limit emission of greenhouse gases, and 

make America more energy-independent. 

It is no longer sufficient to address our Nation’s energy needs 

solely by finding more fossil fuels. Instead, we must take dramatic 

steps toward becoming a clean-energy economy. These include encouraging the use of and investment in clean energy infrastructure 

and energy efficient technologies. 

The Recovery Act—and I thank the Committee for its leadership 

on the Recovery Act—took an important step in that direction, providing more than $80 billion for investment in clean energy technologies. The energy provisions in there are a real success story in 

the Recovery Act. 

The Administration’s budget takes us further by investing in a 

variety of renewable sources of electricity generation, energy conservation measures, supporting the construction of new nuclear 

power plants, advancing the development of carbon capture and 

storage technologies, and providing Federal assistance for state, 

clean energy, and energy conservation programs. 

The President has also called on Congress to invest in a new program of rebates for consumers who make energy efficient retrofits. 

In addition to direct investments in clean energy, the Administration’s budget proposes a comprehensive, market-based policy to 

reduce greenhouse gas emissions from 2005 levels by approximately 17 percent in 2020, and by more than 80 percent in 2050. 

The policy will provide businesses the flexibility to find the least 

costly and most efficient ways of achieving greenhouse gas emission reductions, and address the needs of vulnerable families, communities, and businesses in the course of the transition to a clean 

energy economy. 

With this background, let me turn briefly to the tax-related provisions in our budget relating to energy. Current law provides a 

number of credits and deductions that are targeted toward oil, gas, 


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and coal activities. These tax subsidies are not designed to correct 

an existing distortion or market failure, and therefore, lead to an 

over-allocation of investment resources to these industries and an 

under-allocation of resources to others. This distortion in resource 

allocation results in inefficiency, and generally reduced economic 

growth. 

Moreover, the tax subsidies for fossil fuels must ultimately be financed with taxes, and thus further result in under-investment in 

other potentially more productive areas of the economy. 

Further, in accordance with the President’s agreement at the G– 

20 summit in Pittsburgh to phase out subsidies for fossil fuels so 

we can transition to a 21st energy economy, the budget proposes 

to repeal a number of tax preferences that are currently available 

for fossil fuels. The budget also proposes to limit the ability of taxpayers to claim the foreign tax credit for levies that are likely to 

represent a payment for the right to exploit natural resources, 

rather than the payment of income tax, and proposes as well to reinstate the superfund excise taxes, including the taxes on crude oil 

and imported petroleum products. 

The budget also proposes to extend through 2011 a number of expired or expiring tax provisions related to energy, including incentives for biofuel, renewable diesel, alternative fuels, and alcohol 

fuels, increased tax credits for alternative fuel refueling property, 

tax credits for hybrid automobiles and other alternative motor vehicles, tax credits for energy-efficient new homes, and tax credits for 

energy-efficient improvements to existing homes. 

Finally, the budget proposes to expand the Recovery Act tax 

credit for investments in advanced energy manufacturing facilities. 

The credit, under 48C of the Code is designed to help America take 

the lead in the manufacture of wind turbines, solar panels, electric 

vehicles, and other clean energy and energy conservation projects. 

The Treasury Department and the Department of Energy, as Mr. 

Matt Rogers will go into in more detail, cooperated in awarding the 

2.3 billion of credits authorized by the Recovery Act, awarding 

credits to 183 projects in 43 states, to support tens of thousands 

of high-quality, clean energy jobs and the development of a domestic, clean-energy manufacturing base. 

The 2.3 billion cap on the credit has resulted in the funding of 

less than one-third of the technically acceptable applications that 

we received. The budget proposes an additional 5 billion in credits 

that would support at least 15 billion in total capital investment, 

creating a partnership between government and the private sector, 

and creating tens of thousands of new construction and manufacturing jobs. Because there is already an existing group of worthy 

projects and substantial interest in this, the additional credit could 

be deployed quickly to create jobs and support economic activity. 

Mr. Chairman, this concludes my prepared remarks. I will be 

pleased to answer any questions you or other Members of the Committee may have. 

[The prepared statement of Mr. Mundaca follows:] 


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Prepared Statement of Hon. Michael Mundaca, Assistant 

Secretary for Tax Policy, U.S. Department of the Treasury 


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f 

Chairman LEVIN. Thank you. 

Mr. Rogers. 

STATEMENT OF MATT ROGERS, SENIOR ADVISOR TO THE 

SECRETARY, UNITED STATES DEPARTMENT OF ENERGY 

Mr. ROGERS. Good morning. Chairman Levin, Ranking Member 

Camp, Members of the Committee, thank you for the opportunity 

to appear before you today to report on the progress of the Recovery Act, and specifically the tax credit and payments programs 

under the Recovery Act. 

It’s been a privilege to collaborate with Assistant Secretary 

Mundaca and his Treasury team, as well as the talented team at 

the IRS on these programs, and on other energy-related tax issues. 


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I will keep my remarks brief. This morning I have submitted a 

more detailed testimony for the record. 

It is a tribute to this Committee that the section 48C, clean energy manufacturing tax credit, and the section 1603, payments in 

lieu of tax credit programs, have been among the most successful 

clean energy job creation and innovation programs under the Recovery Act. Today, these programs are putting Americans back to 

work, and positioning the U.S. to regain leadership in high technology, clean energy manufacturing and generation. 

The competitive 48C manufacturing tax credit was so successful 

and so over-subscribed, that the President has asked Congress for 

an additional $5 billion to expand that program. The 1603 program 

gave new life to renewable generation in the United States, and 

should be evaluated as part of a comprehensive energy and climate 

legislation. 

This Committee’s leadership has been important to the success 

of the Recovery Act, and we look forward to working with this 

Committee to ensure long-term U.S. leadership in high technology, 

clean energy, manufacturing, and generation. 

Across the Federal Government, the Recovery Act included more than $90 billion in appropriations, including more than $30 billion 

in tax programs to support more than $150 billion in clean energy 

projects. The Recovery Act directed DOE to work with Treasury to 

administer the $2.3 billion in competitive clean energy manufacturing tax credits. And, likewise, the Act directed DOE to work 

with Treasury to administer an estimated $16 billion in renewable 

energy generation payments in lieu of tax credits. 

We work closely with our Treasury colleagues to manage a detailed, competitive peer review process to select the 183 projects in 

43 states to receive the $2.3 billion available in clean energy manufacturing tax credits. The competition for these funds was over-subscribed 3-to-1 with good projects, and the competitive process allowed us to select a portfolio of really great projects to help lead 

the renaissance in U.S. high technology, clean energy manufacturing. 

Likewise, we worked with Treasury so far to award $3.1 billion 

in payments in lieu of tax credits to 718 renewable energy generation projects in 44 states. The 1603 program directly addressed the 

freeze in the tax equity markets related to the financial crisis, enabling these projects to close financing and begin construction again. 

These tax incentives help support a 39 percent increase in renewable generation capacity in the United States last year. These tax 

programs were particularly effective in getting money out the door 

quickly to put Americans back to work on great projects that otherwise would have been idled in the face of the Great Recession. 

The combination of the 48C program and the 1603 renewable 

generation payments has put the United States on the path to doubling both high technology and clean energy manufacturing, and 

renewable generation capacity by 2012. These programs are bringing private capital off the sidelines and back into the clean energy 

financing markets. Importantly, these tax incentives have made 

the United States globally competitive again in attracting the best 

technology and manufacturing investments to create jobs in the 

United States. 


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These Recovery Act investments are putting Americans to work. 

The tax programs are not actually required to report into 

Federalreporting.gov, but the 1603 fund recipients reported that 

these projects created 12,000 jobs last year and, if they continue as 

expected, would create 60,000 jobs across the life of the program. 

Likewise, the 48C program applications estimated that Federal dollars would support 17,000 jobs directly, and more than 50,000 jobs 

generated by these selected clean energy manufacturing projects. 

The energy tax incentives under the Recovery Act have been effective in creating jobs quickly, and restarting industries that were 

on the verge of shutting down. These incentives were also laying 

the foundation for a broad expansion in high technology, clean energy manufacturing in the United States. 

Thanks to this Committee, these programs are positioning the 

United States to regain global leadership in these high-growth 

markets. And these tax programs remain an important policy tool 

for the future. 

Thank you for the time this morning. I look forward to answering 

your questions. 

[The prepared statement of Mr. Rogers follows:] 


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Prepared Statement of Matt Rogers, Senior 

Advisor to the Secretary, U.S. Department of Energy 


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f 

Chairman LEVIN. Thank you very much. I will ask a question 

or two, and then, Mr. Camp, why don’t you? And then we will go 

down the line. 

As I mentioned to Mr. Camp, there are almost twice as many 

Democrats here at the opening as Republicans, so we will follow a 

process that has been used in the past, two for one, and see how 

that works. 

So, let me ask the two of you and really, I think, referring, Mr. 

Camp, to your charts. I’m not quite sure what the message is from 

the charts, in terms of what the future is going to be. 

I noticed, for example, the estimate from the EIA, which said 

early on in 2007 that the U.S. is expected to continue its dependence on liquid fuel imports. But recently, what they have said is 


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that they expect—this is a more recent estimate, I think—taking 

into account what we have been doing about renewables, it’s expected to continue to climb from the high water mark—this is foreign imports of oil—of 60 percent attained in 2005 and 2006 to 45 

percent in 2035. 

So, if you would, both of you comment on what you think the 

larger picture is, in terms of a shift not only in terms of imported 

goods and products, but in terms of renewable. Is this talk about 

a significant shift over time simply rhetoric? Is it necessary? Is it 

reality? Put in place what you think are the ramifications of a 

chart that shows renewable 7 percent, whether you expect a need 

for and realization of a substantial shift over the next decade or so. 

Who wants to start with that? 

Mr. ROGERS. As we look forward across the next decade, we see 

a significant shift in two primary consumption areas of energy in 

the United States. If you look at the transportation sector, one of 

the most remarkable changes that has already occurred is that we 

probably saw the peak demand for gasoline in the United States 

in 2007. And since then, the demand for gasoline has been going 

down in the United States, and will continue to go down for more 

than the next decade, as a result of a combination of renewable 

fuels, cafe ́ standards, and an increasing electrification of the transportation fleet. 

So, we are seeing in front of us right now a restructuring of the 

transportation sector, to allow it to require substantially less fossil 

fuel in the mix than it historically—I mean you can actually see 

demand going down, even as the economy continues to grow. 

If you look at the power sector, we likewise are seeing a significant shift in the composition of the power sector. We are seeing, 

on current course, a doubling of renewable generation, just in the 

first 4 years of this administration, thanks again to the incentives 

that this Committee has put in place. 

And then, if you look more broadly at the investments that the 

Department has put in place, we have things like a commitment 

to renewing nuclear in the United States, and the ability to grow 

that, which again reduces our dependence on traditional fossilbased sources. 

And so, again, you can see a relatively rapid shift in the composition of the power sector across a decade in time. So if you take a 

snapshot today you say we actually have a small number. And 

what you see, though, is a rapid expansion in the mix of renewable 

generation capacity in the United States that is making our power 

sector substantially less carbon intensive, and significantly more 

energy efficient. 

Chairman LEVIN. Mr.—just briefly, if you would. 

Mr. MUNDACA. Thanks. I will be brief, yes. Just to amplify 

what Mr. Rogers said is we understand this is going to be a transition. We look at these numbers that Mr. Camp put up, and see an 

opportunity here. We have to increase our ability to get energy 

from nuclear, from renewables. The President has committed to 

both, as Mr. Rogers said. Loan guarantees with respect to nuclear, 

we’re talking today about some of the tax incentives for renewables. 


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As you said, Mr. Chairman, this is necessary. This is reality. We 

have to do this. 

Again, with respect to the 48C credit, what we have to do is 

make sure we are a leader in producing the goods that are going 

to fund and move us toward a 21st century clean energy economy 

that has a higher percentage from renewables. We need to have 

that manufacturing base here in the United States, both for our 

own needs, and to become a world leader. 

Chairman LEVIN. Thank you. Mr. Camp. 

Mr. CAMP. Well, thank you. Actually, the chairman started 

questioning in the exact area I am interested in, as well, and particularly Mr. Rogers. 

As I said, if you look at administration data in 2009, fossil 

fuels—which is petroleum, coal, and natural gas—supplied about 

85 percent of America’s energy needs. And nuclear was about 8 

percent and renewable was about 7 percent. Now, those figures are 

about the same as they were in 2000. Now, this is after substantial 

investment from Federal, state, and local governments in renewables. 

What do you expect that breakdown, that profile, to look like in 

10, 20, and 30 years? If you could, give me a breakdown of where 

you see those breakdowns occurring. 

Mr. ROGERS. So, perhaps the best way to do that is in—I can 

give you the detailed breakdowns at each of those points. 

EIA has gone through a detailed assessment under various scenarios of how the future plays out to take a look at that. But, effectively, we see renewable generation growing north of 20 percent of 

the power—of the generation fleet as we move forward over the 

next several decades, and we see—— 

Mr. CAMP. Is that in 30 years, 20 years? 

Mr. ROGERS. So why don’t I get you the exact—— 

Mr. CAMP. Yes, if you want to respond in writing, yes, that—— 

Mr. ROGERS. Then we can have the precise data in front of us. 

Mr. CAMP. Because I think that’s important to understand. I 

mean, we all want renewables to grow. But I think we need to understand. Are we getting value for the taxpayer’s dollar? 

But the real point I want to ask—and I think maybe this probably should also go to Mr. Mundaca—I don’t know how you can tax 

85 percent of energy consumption, from a policy standpoint, and 

continue to grow our economy, when that is how jobs are going to 

be created. 

And, frankly, I don’t think people—I don’t think gas consumption 

declined because everyone has moved to a hybrid vehicle. I think 

a lot of people aren’t driving to work because they’re unemployed. 

And I would really like to see the background, in terms of that 

data. 

But if you could, comment on this idea that we can tax 85 percent of America’s energy consumption and still grow our economy 

and, frankly, try to bring it back. 

Mr. MUNDACA. Thank you, Mr. Camp, for the opportunity to 

address that. What we are proposing to do is remove from the Tax 

Code those subsidies for the oil and gas industry that distort investment. So we are seeking to remove the special preferences in 

the Tax Code with respect to the oil, gas, and coal sectors. 


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Again, having no subsidies in the Tax Code leads to an over-investment in those areas at the cost of some of the other competing 

areas for investment. If you look at the effective tax rates with respect to investment in oil and gas structure, they are much lower 

than with respect to investment in other structures. 

Mr. CAMP. But aren’t those important for exploration and development? And particularly with the discovery of natural gas shale 

all over the country, aren’t we going to want to continue to 

incentivize that as well as incentivize renewables? Aren’t we going 

to need both? 

Mr. MUNDACA. We are certainly going to need both. Recall the 

President’s announcement to open up drilling offshore. Again, we 

recognize this is a transition. But again, the focus on removing 

from the Tax Code the incentives that we don’t think are operating 

right now to do anything other than to lower the effective tax on 

these investments. 

Mr. CAMP. But won’t developing those resources help lessen our 

reliance on foreign imported oil? 

Mr. MUNDACA. The question is whether these tax incentives 

are necessary and efficient to getting us to that point. We don’t see 

that they are. We don’t see the need for them. We think that right 

now what they are doing is incentivizing over-investment into 

these, at the cost of investment into other areas of the economy. 

Mr. CAMP. Well, I just think there are many direct jobs that are 

high-paying jobs directly in the oil and gas industries. But so many 

industries depend on a level of—price for energy. So it won’t just 

be the direct jobs in the oil and gas industry, and there are thousands—tens of thousands—of those. But it will be the indirect effect on energy-intensive industries that employ hundreds of thousands of Americans, that you are going to be making it more expensive for employers to continue to do business. And that means 

there will be fewer jobs created. 

I just—I think I see a problem of taxing what 85 percent of 

America needs to grow our economy in this way. 

Mr. MUNDACA. Again, thank you for the opportunity to address 

those concerns. We are, in the Administration as a whole, very focused on jobs. 

I refer back to testimony before the Senate that the Chief Economist of the Treasury, Dr. Alan Krueger, made a number of months 

ago. The amount of the tax incentives we are proposing to repeal 

are less than 1 percent of the revenues generated in the oil and gas 

industry. We don’t think it will have a significant effect on prices, 

so we don’t see that there will be a significant effect with respect 

to employment. 

Again, what the Administration is proposing to do with respect 

to the shift to a clean energy economy—again, the focusing, as Mr. 

Rogers said, creating good jobs for the next century that can be 

sustained as we move to a 21st century clean energy economy. 

Mr. CAMP. Well, thank you. I see my time has expired. I want 

to thank you both. And, Mr. Rogers, I look forward to your letter. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Rangel. 

Mr. RANGEL. Thank you, Mr. Chairman. One of the problems 

we have in reforming the tax system is that if everyone agreed that 


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a subsidy, a tax incentive, was absolutely unnecessary and we removed it, other people would be able to say it’s a tax increase. Because whenever there is an unwarranted benefit, if you try to justify it, it’s only because of concern of removing something that we 

think is not justified. 

My questions are that during the Carter Administration, he was 

wearing a sweater and we couldn’t put on Christmas lights, and a 

lot of people were critical that the American way of life was being 

adversely affected. I think it’s safe to say that the crisis that we 

face now is really affecting our foreign policy. It really is a problem 

to do with war and peace and allocations of resources that we have 

to protect. 

Having said that, I don’t see this feeling at all as relates to the 

consumers. And I want the name of whoever is in charge in either 

department that I can work with, because everybody knows, if you 

go to any major cities, that the office buildings are empty and lit 

up at night. The air conditioners are working. The highways during 

daytime hours have their lights that are on. I am so pleased in seeing our city monuments and churches and synagogues all lit up 

with this new creative lighting system, and there is no question 

that if you take away my lights on Times Square I will be here 

fighting you to the end, because it really supports tourism and 

makes our lives easier. 

Having said all of that, it’s hard for me to believe that the average consumer has a concern, even with incentives, that we are 

talking about national security. We are talking about a crisis. It’s 

abundantly clear that these investments, everyone should be frustrated, because it looks like to some an increase in taxes. And the 

gains are fairly all—in terms of where we would like to find the 

savings or the alternatives to fossil fuels. 

But can you share with me any—recently there was a 1-hour 

shut-off of electricity or something. Are you familiar with that? Do 

you have any idea what that saved, if anything? Do you know what 

it takes to change behavior, in terms of consumption of energy? Is 

there an effort to share with us? Because we have the responsibility to share with our constituents how bad the situation is, and 

to talk about some degree of discomfort. 

Mr. ROGERS. Sir, as you described, the situation is urgent from 

a national security standpoint. It’s urgent from an environmental 

standpoint. And, frankly, it’s urgent from a competitiveness and 

wealth creation standpoint. 

One of the things that we found most exciting about the 48C program was its re-establishing of U.S. competitiveness in high technology, clean energy manufacturing, which we basically had ceded 

to other countries over the last decade. And so, re-establishing competitiveness in a set of high-growth industries is quite important. 

The second thing, interestingly, about how do we help consumers 

do this better is partly around innovation. One of the things that 

we get most excited about is the rate of innovation in things like 

lighting. We funded a set of projects that promised to make your 

average light bulb use one-tenth the energy that it currently uses 

today for the same price. 

And so, all of a sudden, you can have light, but it actually doesn’t 

consume nearly—— 


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Mr. RANGEL. I don’t mean to interrupt you, but time is running 

out, and I think that’s great. But I am trying to say why would the 

lights have to be on, low wattages it may be, all night long? You 

can go to any town, any city, and see—10:00, 11:00 at night—the 

air conditioners and these low-powered lights are on. 

Is there any effort? Just give me the name of somebody that has 

the responsibility of educating the consumer that this is a serious 

problem, just not lower light bills, but the crisis that we face in 

terms of where we have to—feel that we have to defend the future 

of America, in terms of blood and dollars. 

Now, who—what part of our government would have that responsibility? 

Mr. ROGERS. So our Assistant Secretary for Energy Efficiency, 

Cathy Zoi, has that direct responsibility and charge. And she has 

been working, actually, with—what’s interesting in the United 

States is to work with the local state Governors, each of whom has 

committed to the Secretary of Energy to actually implement a set 

of changes in incentives and behaviors at the state level, because 

a lot of these requirements and structures are state-oriented. 

And so, what Cathy is trying to do is educate the consumer, and 

then work with the Governors to change the local incentives. 

Mr. RANGEL. Well, I don’t think they have been very successful. 

Could you promise me that you would have her to send to me the 

efforts that are being made to educate the consumer, which, of 

course, includes municipalities, local governments, and state governments? 

Thank you so much, Mr. Chairman. 

Chairman LEVIN. Mr. Stark. 

Mr. STARK. Thank you, Mr. Chairman, and I thank the witnesses. 

I guess my principal concern is allowing VEETC to expire. And 

I wonder if either or both of you can give the Committee some indication of what VEETC costs the consumer in higher food costs and 

in higher inflation in their entire operation, and whether also you 

have any figures on what the ethanol, in effect, loses as a net energy—either or both of you can comment on that. Mr. Mundaca. 

Mr. MUNDACA. Thank you, Mr. Stark. Yes, you referenced we 

have, in the Administration, a budget proposed to extend, as part 

of a package of extenders, the provisions with respect to ethanol. 

But obviously, we are certainly willing to engage with you on—in 

the context of broad energy policy—what the future should be with 

respect to various provisions that have been extended year to year. 

As we make a broader effort to understand what our energy future is, and how the government role in that should proceed, we 

should look at these individual provisions. And we are more than 

willing to do so. 

Mr. STARK. I guess I am curious if you understand them now, 

as to what it costs the consumers—do you understand now what 

it costs? Do you have to have a study? 

Mr. MUNDACA. We have some revenue numbers on the provision, as a whole. We can work on the specific provisions, with respect to ethanol and what the revenue costs of those might be. 

Mr. STARK. You don’t have them. 

Mr. MUNDACA. I don’t have them with me right now. 


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Mr. STARK. But they are available to you now? 

Mr. MUNDACA. I believe we can get them, yes. 

Mr. STARK. Could I get them tomorrow? 

Mr. MUNDACA. I can’t promise tomorrow, but we will get 

them—— 

Mr. STARK. The day after? 

Mr. MUNDACA. As soon as we possibly can. 

Mr. STARK. All right, thank you very much. 

Chairman LEVIN. Mr. Herger. 

Mr. HERGER. Thank you, Mr. Chairman. Mr. Mundaca, in your 

testimony you state that the Administration proposes to enact a 

cap and trade program. Last year the House passed a cap and tax 

bill that would have raised taxes by $872 billion. Many of my constituents in rural northern California are already paying some of 

the highest gas prices in the country, and can’t understand why 

Congress would be considering a massive, job-killing national energy tax in the middle of a recession. 

Even worse, the data shows that the 872 billion energy tax won’t 

have a substantial impact on global emission levels unless China 

and other countries take similar action. 

Mr. Mundaca, why should the United States impose energy 

taxes, either in the form of a cap and tax scheme or direct energy 

taxes, if China, India, Brazil, and other leading emitters refuse to 

take similar actions to reduce their emissions? 

And if the United States unilaterally enacts stringent emissions 

standards, aren’t we just encouraging even more domestic manufacturers and the jobs they support to move to countries with less 

stringent emissions restrictions? 

Mr. MUNDACA. Thank you for that question. As I mentioned in 

my testimony, the Administration does support a market-based approach to dealing with the reduction of greenhouse gases. We do 

understand there are differing views on the best way to achieve it. 

We are obviously more than willing to work with this Committee 

and others to form the best way to do it, but we do think we need 

to move ahead on finding the best market-based approach to address the needed reduction in greenhouse gas emissions. 

We do understand the imperative to get other countries on board 

with this effort, and those efforts are continuing. But we do need 

to move ahead on this, we need to address this problem. This Committee and this body as a whole has shown leadership on this 

issue. We look forward to continuing to work with you all on this. 

Mr. HERGER. So even though these other countries show no indication that they are going to do the same, you feel you should 

move ahead? 

I’m sure the Administration, you’re aware that just competitive 

forces will be driving many thousands, if not millions, of jobs overseas where they will be more competitive? 

Mr. MUNDACA. Again, I think we can’t afford to stay still on 

this. We do need to move ahead. But we understand the need to 

have others with us on this effort. But we need to be in a place 

to propose what it is we’re going to do as we engage with others 

in this effort. 


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Mr. HERGER. Well, thank you. Moving on to another question, 

I would like to inquire briefly about the existing tax credits for renewable energy. 

Currently, the investment tax credit provides for a level playing 

field among different renewable energy and energy conservation 

technologies. However, the production tax credit under section 45 

provides some renewables such as open loop, biomass, and hydropower with only half the credit amount that is available to other 

technologies such as wind and geothermal power. 

This is of particular concern for mountainous areas like the district I represent, where we have substantial biomass and hydropower resources, but where wind power is less feasible. Mr. Meek 

and I have offered bipartisan legislation—H.R. 2626—that would 

provide the same production tax credit for all electricity produced 

from renewable resources. We feel that tax credit parity would ensure a level playing field for all types of renewable energy production, and is consistent with the Administration’s goal of encouraging more investment and renewable energy. I understand, Mr. 

Mundaca, that you’re probably not prepared to comment on this 

specific proposal today, but I would appreciate it if you could get 

back to me in writing with your thoughts on this legislation. 

Mr. MUNDACA. We are certainly willing to work with you on 

this. Again, as we move ahead with a comprehensive energy policy, 

we look to review the different elements that make up the policy 

today to see if they can be improved. 

Mr. HERGER. Thank you very much. Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you Mr. McDermott. 

Mr. MCDERMOTT. I have a simple question, and that is, if energy conservation is the quickest way to make some changes in the 

CO 2 in the atmosphere, I would like to hear how you think our tax 

policies are working in terms of encouraging individuals to do the 

retrofitting of their houses, and how these tax credits to green industries interact with bringing production into the United States, 

rather than having us buy solar panels from China. 

If that’s what the situation presently is, as it seems to me from 

reading, I would like to hear how we can change that, and change 

the balance of payments, clean up the energy, and get on an even 

track with the Chinese. They are, it seems to me, going to control 

the whole of the production of green energy equipment in the future, if we don’t start moving in that direction. 

So, I would like to hear what—California said, you know, ‘‘Paint 

the top of your roofs white and reflect the energy, and you can save 

a lot of energy.’’ And that, in my view, is where—I want to understand where the Tax Code can be used to encourage that. 

Mr. MUNDACA. I will start briefly, and Mr. Rogers may have 

something to add. 

We agree wholeheartedly we need to look at how the Tax Code 

can incentivize both supply and demand, with respect to clean technologies. As you mentioned, we have Tax Codes—provisions now 

that incentivize for individual consumers to buy and install solar 

panels. The President, with respect to the Home Star program, is 

calling for additional incentives for retrofits. Obviously, that’s on 

the demand side to get consumers—— 


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Mr. MCDERMOTT. When is that legislation going to be ready? 

Before election? 

Mr. MUNDACA. I believe we’re ready to work with anyone interested in moving that immediately. 

Mr. MCDERMOTT. You’ve got the language written—— 

Mr. MUNDACA. I don’t know that we have the—— 

Mr. MCDERMOTT.—for the Home Star program? 

Mr. ROGERS. Yes, the language is written. 

Mr. MCDERMOTT. Thank you. Go ahead. 

Mr. MUNDACA. That’s on the demand side. And then, obviously, 

the call for expanding the 48C program is to create the manufacturing base here in the United States to supply the solar panels, 

et cetera, that we are incentivizing consumers to buy in order to 

make their homes, their lives, more energy efficient. 

So, again, it’s a comprehensive program on both sides of the 

equation. We recognize the concerns that other countries for years 

have been incentivizing their own clean energy manufacturing industries. We’re playing a little bit of catch-up. That’s why the 

President has made the bold proposal for the additional 5 billion 

under 48C. 

Mr. ROGERS. My only addition would be that this is about global competitiveness. The U.S. has among the most advanced technologies, both in energy efficiency and in renewable energy. Historically, we have innovated and then the manufacturing has gone 

abroad. 

What this Committee did, in terms of having the 48C program, created an incentive to bring, just on the renewable side, $10 billion of foreign direct investment into the United States to create 

U.S. jobs over the last year. That—— 

Mr. MCDERMOTT. From outside? 

Mr. ROGERS. From outside the country into the United States, 

bringing the best technology and the best manufacturing here. It’s 

that kind of incentive that, all of a sudden, makes the U.S. globally 

competitive again. We had lost competitiveness, and now we are 

competitive again. Because otherwise, you’re right, China is going 

to end up wanting to lead in this globally. 

Mr. MCDERMOTT. What percent of the solar panels sold in the 

United States today—or purchased in the United States today—are 

made in the United States? 

Mr. ROGERS. I don’t have a number for solar. In the wind sector 

it’s 62 percent of the value added of the installations under the 

1603 program were manufactured in the United States. So that— 

and what’s powerful, again, about the incentives from this Committee is 5 years ago that was 25 percent. So we have now more 

than doubled the manufacturing capacity in the United States. 

And things like an expansion of the 48C program are the single 

best approach that we can take to build U.S. manufacturing, and 

make sure that when I buy a U.S. car, I buy a Ford, I get a 72 

to 74 percent domestic content. That’s where we can be, just with 

the 48C investments that we have already made—and if we can 

continue that kind of investment program, the U.S. not only can 

make for the U.S. market, but export globally. 

Mr. MCDERMOTT. Are you saying that we are taking back from 

the Danes and the Chinese the actual production of the generators? 


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Mr. ROGERS. We are taking back—— 

Mr. MCDERMOTT. You guys sometimes can baffle us with 

words, okay, and we’re not quite sure what you mean when you say 

72 percent is American. You mean made in the United States—— 

Mr. ROGERS. We are bringing—— 

Mr. MCDERMOTT [continuing].——those generators? 

Mr. ROGERS. That’s right. We are bringing manufacturing back 

to the United States from Germany, from Spain, from Denmark, 

from China, as a result of the programs that this Committee has 

put in place. 

Mr. MCDERMOTT. Are there any problems with that program 

that we need to fix to make it easier, to make it work more efficiently? 

Mr. ROGERS. Well, the chief problem that we encountered was it was capped at $2.3 billion and we had three times the number 

of really good projects that we would have liked to fund under the 

first round. 

And, if we have the opportunity to go out, there are others that 

would now apply, because the technology continues to evolve. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Lewis. 

Mr. LEWIS. Thank you very much, Mr. Chairman. Let me thank 

you for being here today for this hearing. 

We need green jobs and we need them now. In my city of Atlanta, Georgia, people hear about the green job economy. They hear 

the money has been spent to create the green job economy. But 

they do not see any changes in their everyday lives. 

Could the two of you tell me what the Department of Energy and 

the Department of Treasury—what are you doing to reach out to 

the poor to see that they get their fair share when it comes to 

green jobs? 

Mr. ROGERS. One of the things under the Recovery Act, broadly, 

that has been very important for building green jobs in local communities has been the partnerships that we have had with states 

and cities. 

The Weatherization Assistance Program is spending more than 

$5 billion working with community action agencies in every community around the country. The Energy Efficiency Conservation 

Block Grant program is sending funds through cities to enable 

them to invest in energy efficiency at the local level. 

And as we go out and talk to communities, it is the ability to 

bring local workers into these agencies—what we are trying to do 

with these programs is to buildup a workforce, a trained workforce 

in the local community, that then is able to serve a broader market. 

If you think about the combination of the investment in weatherization, where we get people trained up, and then in Home Star, 

what we are trying to do is invest in weatherizing poorer people’s 

homes, putting money back in their pockets with people in the local 

community so that, as we then move into Home Star, we have a 

trained workforce that is ready to go across a much broader marketplace. 

And so, those programs are, in fact, beginning to bear fruit as we 

look at the jobs data that—the next jobs reporting period closes 


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here on Friday. I think we are going to be quite pleased with the 

amount of jobs that we are seeing in the local community as a result of this work. 

Mr. LEWIS. Thank you. 

Mr. MUNDACA. Thank you. Just to add again the President’s 

desire to expand the Home Star program. Again, I think it’s the 

best way to deliver benefits to local communities, because it is very 

focused on individual consumers, then using local workers with respect to the installation of these purchased energy efficient products. 

So, again, that may present the best opportunity to reach down 

to the local communities. As Mr. Rogers mentioned, partnering 

with the states is very important in this effort, as well. 

Mr. LEWIS. In many communities all across America you have 

groups that have been funded by the Federal Government. At least 

one group called Youth Build, where young people have been 

trained to go out and help low-income individuals, elderly, their 

families to rebuild, improve their homes. You see a possibility of cooperating with organizations and groups like Youth Build? 

Mr. MUNDACA. I think there certainly is the possibility. We 

should talk about the best way—outreach, again. I think the program to date has worked with state and local governments, but I 

think that could be expanded to individual outreach, as well. 

Mr. LEWIS. Thank you very much. 

Chairman LEVIN. Thank you, Mr. Lewis. 

Mr. LEWIS. Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. Mr. Mundaca, I 

think that in your testimony you speak about the President’s budget proposal to provide an additional $5 billion in advanced energy 

manufacturing tax credits. And that would be on top of a $3.2 billion already awarded by the Administration. 

I support having a cleaner, greener, more energy-efficient economy, but it ought to be market-driven, not government-directed. 

Back in my district I note that companies like Wal-Mart have 

opened up a state of the art green facility. They did it on their own. 

And they are doing so because it makes sense for their bottom line. 

I don’t believe Washington bureaucrats ought to be picking winners and losers, as is the case with this program. I think it’s a far 

better approach to lower our corporate tax rate, which is currently 

the second highest among industrialized countries, so that businesses—all businesses—have a stronger incentive to invest and 

create so-called green jobs here at home. 

As the Assistant Secretary for Tax Policy, would you agree that 

our high corporate tax rate, in effect, serves as a penalty on businesses that successfully undertake green investments here at 

home? And, moreover, the high corporate tax rate negatively impacts job creation. 

Also, given that businesses plan for long term, wouldn’t a permanent reduction in the corporate tax rate be far more preferable, in 

terms of encouraging an economy-wide investment in green, as opposed to a short-term credit that’s doled out by bureaucrats to a 

few select businesses? 


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Mr. MUNDACA. Thank you, Mr. Johnson, for that question. We 

understand, and it’s a policy behind the proposed repeal of certain 

incentives in the Tax Code that the Tax Code should be as neutral 

as possible, with respect to investment decisions. We make the 

choice to include incentives when it is that we recognize that markets may not be pricing in accordance with the full cost of programs. 

For example, there may be positive externalities with respect to 

clean energy, the lower pollution produced by them that warrants 

the Federal Government providing an incentive to recognize those 

positive externalities. 

Regarding the corporate tax rate, we do understand in the Administration the role that that rate plays in our general economic 

activity. We recognize that the rate is high. In the context of more 

fundamental tax reform, where we look at all of these issues—corporate tax, individual tax—we do need to consider the fact that 

currently we have, on a corporate tax side, a relatively high rate, 

as you identify—by some standards, the second highest in the 

world after only Japan—but a relatively narrow corporate tax base, 

such that the effective tax rate on corporations in the U.S. is about 

average for G–7, G–20 countries. 

So, as we look to fundamental tax reform, we need to look at the 

rate, we need to look at the base, we need to look at the entirety 

of the tax system to come up with a tax system that our country 

deserves, and can move us ahead, economically, going into this century. 

Mr. JOHNSON. And you believe the tax credit is better than 

changing the Tax Code to help them? 

Mr. MUNDACA. I think, as we proposed with respect to 48C, 

those incentives are needed and necessary to transition us to a 

clean energy economy. There is the larger question of other provisions in the Tax Code that now are the corporate tax base, and 

therefore necessitate to collect revenue at the higher rate that we 

have. 

Again, we need to look at that rate as compared to what the base 

is, to decide what incentives are left in, what can be taken out, and 

how the rate can be adjusted. 

Mr. JOHNSON. Well, concerning tax increases that are also 

being talked about, do you think that that could cost us green jobs 

that the Administration cares about by raising taxes instead of lowering them on corporate structure? 

Mr. MUNDACA. Right now I don’t think the budget has a particular corporate tax general rate increase. The repeal of the subsidies that we’re talking about here today are—again, getting back 

to your first point, that we do want the Tax Code to be as neutral 

as possible, with respect to investment decisions. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Rogers, did you—Mr. Johnson has a few 

seconds left. Did you want to participate? 

Mr. ROGERS. My only addition would be I also think there is 

a notion about making sure that these tax incentives are efficient. 

One of the things about the 1603 program that is, indeed, benefiting some of the constituencies in your district is the efficiency 

with which that can then be financed. 


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Because we need to make sure what the Tax Code says—and 

then the banks actually show up and finance these projects. What 

we had before was relatively inefficient; these are now efficient programs, and I think the guidance that this Committee has provided 

to make the Tax Code more efficient has actually made a big difference, in terms of how the renewable industry can grow. 

Chairman LEVIN. Thank you. Mr. Neal. 

Mr. NEAL. Thank you, Mr. Chairman. Mr. Mundaca, both your 

testimony and that of Mr. Rogers speaks of the success and growth 

of alternative energy manufacturing facilities. 

In Massachusetts recently, the state pulled together more than 

$20 million in grants to ensure a solar manufacturer would locate 

a new plant within our state, the old Ft. Deven site, only to watch 

it be lured away by China, which offered $30 million in government 

assistance. 

How can the Committee be assured that our green energy policy 

leads to green jobs and more jobs here in the United States? 

Mr. ROGERS. The 48C program is a simple one. In terms of 

bringing manufacturing investments to the United States, it is 

clearly working. We are actually taking market share away from 

other countries, and bringing that manufacturing capacity here, to 

the United States. 

Our challenge, as we look forward, is the resources on the manufacturing side are small, relative to the demand on the development side. And so, what we need and what we’ve asked the congress for, is the authority to expand that ability to bring more manufacturing in, because I think, in terms of global competitiveness, 

the ability to focus on manufacturing—particularly high technology 

manufacturing here in the United States—is essential for our longterm growth and competitiveness. 

Mr. NEAL. Mr. Mundaca. 

Mr. MUNDACA. Yes, I would just say we do recognize the challenges. As Mr. Rogers emphasized, this is a global issue. We are 

in competition with other countries to bring these good jobs and 

good technologies here, to the United States. I think we do have 

the leadership in the production of the intellectual property. We 

need to make sure we follow up with the hard resources to get the 

plants here, to produce good jobs, to get American-made parts into 

the clean technologies used here by American citizens. 

Mr. NEAL. My guess is you’re familiar with the Deven issue? 

Mr. MUNDACA. Yes. 

Mr. NEAL. Yes, it drew a great deal of controversy and fire 

across the state, and it was highlighted by local media for days on 

end. So I think we need to be mindful of that as we move forward, 

that these investments are to be as good as we tell everybody they 

are to be, and we can’t have them outsourced based upon that competitive nature of one government upping the ante toward the next. 

Mr. MUNDACA. That’s right. I think, as part of that as well— 

and we need to address this in the context of comprehensive energy 

policy—we do have to have some certainty in what benefits are 

available, so that manufacturers and others can know what benefits they are going to get, whether they will be there in the future, 

so they can make the decisions to locate here. 


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Mr. NEAL. And I think the corollary to that is we—with the Recovery Act, we made a very important downpayment on U.S. competitiveness in these industries. We now have the opportunity and 

the challenge of making the pivot toward a set of long-term incentives. That’s why we need to put a price on carbon pollution. That’s 

why we need a comprehensive energy and climate legislation. 

That’s why, as we look at those, making sure that the tax provisions create certainty as we move forward will actually help the 

capital formation that is essential to the success of these industries. 

Thank you. Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you, Mr. Neal. Following our rules, Mr. 

Becerra, you are next. 

Mr. BECERRA. Thank you, Mr. Chairman. And, gentlemen, 

thank you for your testimony. A couple of quick questions. 

Do we do anything right now through the Tax Code that essentially subsidizes American companies going abroad, outside the 

U.S. borders, to try to explore, research, find, secure, and return 

any sources of energy back to the U.S.? 

Mr. MUNDACA. There are a number of elements of our Tax 

Code that we in the Administration feel may incentivize investment by American countries overseas, just through the tax treatment of income earned overseas versus the tax treatment of income 

earned here, in the United States. A lot of that does have to do 

with intangible value and the transfer offshore. 

The Administration has put forward a number of proposals in 

the budget to deal with those issues, some specifically targeted to 

intangibles, some more general with respect to our tax system and 

how it treats foreign source income. I think we do need to look at 

that as part of overall—more fundamental tax reform. But these 

proposals we put forward, we think, can be moved ahead even outside the context of fundamental tax reform, because they address 

issues under our current rules that do incentivize investment overseas at the cost of investment here in the U.S. 

Mr. BECERRA. And no one is saying that investment overseas 

is not good. And certainly we need every source of energy that we 

can find. And the sooner we can clean up the sources of those energies, the better. 

But to the degree that we have precious dollars to invest through 

the Tax Code or elsewhere, should we try to focus those on domestically oriented resources of energy? 

Mr. MUNDACA. Of course. That’s exactly right. We need to 

make sure that our Tax Code does not give a rational U.S. company the incentive to invest dollars overseas because of the tax 

treatment of the return on that investment. 

Mr. BECERRA. And do you believe, then, that the Administration will put forth some good proposals to try to help us try to move 

the incentives toward domestic production before we start rewarding folks for doing production—exploration and production—overseas to bring it back here to charge us for it? 

Mr. MUNDACA. We have done a number of proposals already. 

We proposed to make the R&D credit permanent. We have proposed, as we have talked about here, some specific energy incentives. We, as well, have put forward a series of tax proposals with 


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respect to the taxation of income earned overseas, particularly with 

respect to transactions that look to shift intangible value overseas. 

Again, it’s part of a package. We think that rationalizes our tax 

system, and makes the investment decisions more tax-neutral, as 

opposed to now, where there are incentives to move investment 

overseas, at the cost of investment here, in the United States. 

Mr. BECERRA. Well, I appreciate those words. And, Mr. Chairman, I hope we are able to follow up with the Secretary and others, 

to try to make sure that, as we provide those incentives, we do 

have a rational approach to try to allocate our precious resources 

principally here domestically, to search for the—those sources of 

energy. And, where possible, if it’s a wise investment, to try to help 

American firms try to search out for that energy wherever it may 

come from outside the U.S. border. 

So, thank you, the two of you, for your testimony. Mr. Chairman, 

I yield back. 

Chairman LEVIN. And thank you, Mr. Becerra. This is a hearing 

that is a prelude to work on specific legislation. And we will take 

that very much into account. 

I think Mr. Linder—I mean Mr. Nunes and Mr. Tiberi wish to 

exchange positions, is that—so that’s fine. I think, therefore, Mr. 

Tiberi, you are next. 

Mr. TIBERI. Thank you, Mr. Chairman. And thank you both for 

testifying today. 

Kind of following up on what Mr. Camp talked about when he 

spoke, we believe on this side of the aisle of an all-of-the-above approach, and we believe that that will help create jobs, just across 

the board. 

Mr. Mundaca, you stated, in response to Mr. Camp, that you 

didn’t believe that the provisions in the President’s proposal, in his 

budget proposal, his energy proposal, would not impact jobs in the 

domestic oil and gas industry. People in the oil and gas industry 

couldn’t disagree with you more in Ohio. 

In Ohio, we have 50,000 people that work in the oil and gas industry, mostly employed by small, family owned businesses. In 

Ohio, since the stimulus bill passed, we have lost literally hundreds 

of thousands of jobs. So jobs in Ohio right now is a big issue. It’s 

the biggest issue. And this budget that the President has proposed 

has a lot of people worried, with respect to the issue of jobs. 

Let me quote from a constituent of mine, who is in the oil and 

gas industry, with respect to this proposal that you have talked 

about today. He says—and I quote—his work ‘‘will stop,’’ and his 

industry ‘‘will evaporate overnight’’ if the President’s proposals that 

you testified about are enacted. 

Now, again, we have over 50,000 men and women in this industry. And the irony is when their businesses go away, when their 

employees go away, we will then rely more on foreign, out-of-thecountry sources to supplement what is going to be lost in Ohio. 

How does that jive with what you just talked about? How do you 

respond to that? This is a guy who is actually on the ground, an 

employer working in the industry, and he is not alone in saying 

that they will stop. 

Mr. MUNDACA. Well, thank you for that. We can certainly engage further on what specific proposals may be impacting a parVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00065 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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ticular taxpayer. Again, when we crafted these proposals and we 

looked at their effects, the overall effect on the industry is small. 

We don’t expect the job effects to be significant. We look at this as 

an entire package of provisions to take out of the Tax Code, the tax 

preferences for fossil fuels, while we transition to a clean energy 

economy. 

Again, we are very focused on jobs, and the Administration in 

general are concerned about the loss of jobs and getting us back on 

the path to creating jobs here in the United States. 

Again, I would be willing to talk to you further about any of the 

specific proposals that may be creating these issues. But again, 

when we formulated these, we looked at those incentives, those 

subsidies in the Tax Code, that we could not see as being effective, 

and therefore, led to an over-allocation of investment to certain sectors at the cost of investment in others. 

Mr. TIBERI. Well, reclaiming my time, in conjunction with this 

hearing, the Joint Committee on Tax issued a pamphlet in connection with the hearing that says that increases in the price of domestic fossil fuel could—and I quote again—‘‘primarily result in 

substitution of foreign fossil fuel sources for domestic sources.’’ 

So, essentially, what you are doing in the budget proposal—you 

called it incentives—you are going to raise taxes on domestic oil 

and gas producers in Ohio and in our Nation, taxes that would not 

be raised on foreign sources. 

So, if you are raising taxes on these small businesses, and essentially businesses, jobs that exist today that will no longer exist tomorrow, how does that help our economy? How does that help our 

domestic energy business, when not only do employers and employees in my district in this industry say that, but Joint Tax even says 

that? 

Mr. MUNDACA. Again—— 

Mr. TIBERI. And, by the way, it’s kind of common sense. 

Mr. MUNDACA [continuing]. Again, we look at this as a package 

of proposals. We have—— 

Mr. TIBERI. But aren’t you raising taxes on just the domestic 

side and not the foreign side? 

Mr. MUNDACA [continuing]. We have a number of provisions in 

here, as I mentioned, that address those subsidies we see in the 

Tax Code. There is also a provision in there with respect to those 

domestic U.S. companies that have operations overseas that are 

taking a foreign tax credit, with respect to payments we think really represent royalties, as opposed to foreign tax—— 

Mr. TIBERI. Reclaiming my time, last minute. Let me just give 

you his comments here, and I want you to address this. He says 

that you are repealing, specifically for small businesses, the percentage depletion, the marginal well tax credit, the intangible drilling costs. And also, the intangible drilling cost tax credit is necessary because that gives small businesses like his the edge, the 

ability to compete with the big guys. 

How would you address that? If you take those away, he is gone. 

Mr. MUNDACA. Again, we are looking to remove those provisions in the Tax Code that advantage one sector over another, that 

lead to an over-allocation of resources to one set of taxpayers, as 

opposed to another. 


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Mr. TIBERI. So you won’t deny the fact that if you give the— 

if you take those away from small businesses, they say they no 

longer exist. Foreign competitors aren’t impacted by it. Then how 

does that advantage employees in my state? 

Mr. MUNDACA. Again, they’re a package of proposals with respect to energy provisions. There are proposals we have included 

with respect to the foreign operations of U.S. companies where we 

think there may be too rich a tax credit available, with respect to 

foreign levies that are assessed against them. We also have, as we 

have talked about, incentives for transitioning to a clean energy 

economy. 

We think the package, overall, is fair. It tries to remove from the 

Tax Code those provisions that are leading to distortions in investment and again, transition us to a clean energy economy. 

Mr. TIBERI. So what do I tell my constituents who are out of 

a job, then? 

Mr. MUNDACA. Again, we are willing to talk to you further 

about what particular aspects of the proposals may be impacting 

individual taxpayers. But again, we have identified those provisions that we do think lead to distortions in investment and overallocation of resources, and prevent us from this transition we do 

need to make. 

Mr. TIBERI. Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Tiberi, we will be talking about that within our committee. 

Mr. Doggett, you are next. 

Mr. DOGGETT. Thank you, Mr. Chairman. And thank you, gentlemen, for your leadership in trying to move us from fossilized 

thinking and a fossil-based economy. I think it’s particularly appropriate that you are here to testify about this in this Committee, 

since Federal policy, as a whole, on energy has relied much more 

on tax expenditures with preferences and exclusions and credits in 

our Tax Code than it has on appropriations and direct expenditures 

to advance energy policy. 

As—just with reference to the last question you’ve been responding to, Mr. Mundaca, I would say I see a distinction between an 

Exxon Mobile, which last year reported over $45 billion of profits 

and reported a tax liability of 0 on that $45 billion in profits, no 

doubt helped by the fact that it had 20 wholly owned subsidiaries 

to help it avoid tax liability in the Bahamas, Bermuda, and the 

Cayman Islands. 

I see a distinction between that and a small, independent operator somewhere in the country responsible for finding most of the 

new—particularly natural—gas that I think is important to help us 

transition to a more clean energy economy. And I think we have 

to consider that as we review your budget proposals. 

But we certainly need to look at all of these issues if we are 

going to have both our tax expenditure policy complement our direct expenditure policy in moving us to our clean energy. 

Let me ask you, Secretary Mundaca, specifically with reference 

to the ongoing discussion that we have in the extenders legislation 

that is pending here before Congress, you have called for extending 

certain expired provisions, but letting temporary incentives that 

benefit fossil fuels expire. 


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As we consider these provisions that are in current law, would 

you support efforts to improve these provisions in ways that are 

consistent with the goal of having a clean energy economy? That 

is, without getting into all of the specifics, do you welcome attempts by our Committee to improve these provisions, to continue 

the transition from a dirty energy economy to a more clean energy 

economy? 

Mr. MUNDACA. Thank you for that question. Yes, we do certainly welcome that effort. We do need, I think, to have everything 

that we can look at on the table to look at, as we try to make these 

improvements, and we try to make these transitions. 

As you know, the Administration proposed to extend, in whole, 

certain particular expiring provisions of the Tax Code. But we certainly do welcome the effort to look underneath some of those provisions to see if there are elements that should be improved as we 

look to extend. 

Mr. DOGGETT. Well, and as we look at the various provisions 

we have—and not all of these, of course, are in the extenders—but 

we have here 132 pages of present Federal tax provisions dealing 

with energy that we are reviewing, as a committee, from the Joint 

Tax Committee today. And I think what we do need is more information in order to make an intelligent evaluation of which of those 

incentives work and which don’t. 

One of the most important pieces of information—and our colleague, Earl Blumenauer, is really principally responsible for this— 

is the request that there be a carbon audit done that I know you’re 

familiar with, that Treasury has now engaged the National Academy of Sciences, but we need that information, and we need it soon 

to be able to provide a careful evaluation of this. 

And then, as I look down the list of incentives that are in your 

testimony, we’ve got a dollar a gallon for biodiesel that’s pending. 

I have at least one plant that’s on cold start, about to close down, 

because there hasn’t been an extension of that. On the other hand, 

I have got some folks that are saying that’s diverting feed stock 

from other industries. 

We’ve got $.50 for alternative fuels, $.45 for alcohol fuels. Whether those are the appropriate levels for the credit, and what good 

those credits are doing, is something we really don’t have very good 

information on. It’s one of the reasons that, on the extenders, I proposed a study to review the efficiency of these. But whether $.45 

is the right level for one—for alcohol fuels, or whether it should be 

$.60 or whether it should be $.25 or should be 0 is something we 

need to look to Treasury and the Energy Department for more information on than we currently have. 

I see your testimony is basically saying, ‘‘This is what was in the 

extenders bill,’’ or, ‘‘This was what was in the stimulus bill,’’ or current law, and, ‘‘Let’s give it—let’s extend it a little longer.’’ There 

may be justification for doing that, but I don’t think we should extend it much longer without better information on both the carbon 

characteristics, and we need the Energy Department and the 

Treasury Department both more involved in that process of giving 

us the information to compare and contrast these incentives, all of 

which are not created equal. 


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Would you—either of you—care to respond about the role your 

departments can play in helping us provide that information and 

evaluate these tax expenditures in energy? 

Mr. MUNDACA. Yes, I will. We understand the importance of reviewing all of these, and obviously, reviewing them on the basis of 

solid information. 

Again, I thank the Committee for their leadership on these 

issues, for getting us the funding for the study that we’re now talking to the National Academy of Sciences to do, with respect to a 

carbon audit of the Tax Code. It’s an important step forward in getting the information we need to make these important decisions in 

a fully informed manner. 

Mr. ROGERS. We value the opportunity to collaborate with 

Treasury on the 48C and 1603 programs. We look forward to other 

opportunities to do that. We feel a responsibility to justify our appropriations as part of the budget, and we feel a responsibility to 

help Treasury on the tax expenditures, as well. 

Chairman LEVIN. Mr. Thompson. 

Mr. THOMPSON. Thank you, Mr. Chairman, and thank you to 

the witnesses for being here. 

I want to follow up on one part of what my colleague, Mr. 

Doggett, mentioned, and that’s the importance of Treasury to be 

able to help us quantify where we go. 

One good example of this is in our efforts through the Recovery 

Act to pursue renewable energy policy, we put in place some tax 

measures that would actually grow renewable energy in this country. And some of it has been extremely successful. 

At the time, a number of us were concerned that that policy 

agenda would help drive jobs overseas. Specifically, by the expansion of renewable energy equipment that is good for this country, 

we were concerned that that equipment would be made in China 

and Japan and Germany, and were able to put language in the 

bill—and it’s been referenced here; I think the chairman talked 

about it, the manufacturing tax credit component, which sadly is 

going to expire. 

But that’s an example of something that the Department can do 

on the front end to help identify these unintended consequences. 

We caught this one, and it was—what we did was good, we just 

need to continue to do it. 

So, if we could get—or maybe hear from you today—some sort of 

commitment as to how we would continue to be able to work together and rely on you as a resource for that, I think that would 

be important. 

And, Mr. Chairman, if it’s appropriate, I have got some letters. 

As you know, I am trying to expand that, and I have got some letters here that state what it means for jobs in the United States of 

America if, in fact, we do expand that manufacturing tax credit. 

And I would like to submit those for the record. 

Chairman LEVIN. Excellent. Without objection. 

[The information follows:] 

Mr. THOMPSON. Thank you. And if you could add anything to 

that, I am all ears. 

Mr. MUNDACA. Thank you. We recognize, as both Mr. Rogers 

and I have testified, the importance of and success of the 48C credVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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it. And again, we thank the Committee for their leadership on this, 

their continuing support of this program. 

Again, as we discussed, we have the incentives for individual 

consumers and businesses to buy this equipment. But we did need 

to provide the incentives to have the manufacturing facilities here 

in the U.S. to produce that equipment that we’re incentive to buy. 

It’s been a great success. We look forward to this important expanding, and again, thank the Committee and the House for what 

it did in the Recovery Act, in taking these important steps. 

Mr. ROGERS. The only thing that I would add to that is the 

linkage between project development, manufacturing, and innovation is central to the competitiveness of the U.S., globally. And 

sometimes we forget a piece of that linkage. But what this Committee has clearly done is to link the project development and the 

manufacturing with 1603 and 48C, and then, with the R&D tax 

credit, the innovation side of this. 

And if you think about those three pieces fitting together, good 

jobs grow and stay when you put those three pieces all together. 

If we lose a piece of that equation, all of a sudden we just get the 

development, we lose the manufacturing. By the way, the innovation goes too. 

And so, one of the things we have to be cognizant of is how we 

keep those three pieces in balance in the Tax Code and in our incentive structures over time. 

Mr. THOMPSON. Do you have any data that would give us an 

idea of what kind of job growth has been accomplished because of 

these tax—because of the tax policy that we put forward in the Recovery Act? 

Mr. ROGERS. Sir, the direct jobs attributable to the 1603 program and the 48C program, to the best of our knowledge, are 

60,000 for the first and 50,000 for the second—60,000 for the 1603 

program across its life; 50,000 for the 48C program across its life. 

Those are the estimates, going in. Obviously, we will have to know 

what it is, ex post. But that is our best estimate at the current 

time. 

Mr. THOMPSON. And that—and you drilled down pretty deep to 

get that? That goes all the way back to the—— 

Mr. ROGERS. That goes down to the specific projects and building up from the—— 

Mr. THOMPSON. But how about all the way back to the equipment used to manufacture the—— 

Mr. ROGERS. So we are then not going back all the way—if you 

then take a broader look at what’s going on across the supply 

chain, the number is much larger, in terms of the total jobs generated. Those are just the jobs on the projects that we have been 

able directly to—— 

Mr. THOMPSON. Will you be able to get a more accurate and 

more inclusive number for us? 

Mr. ROGERS. This is something we are working closely with the 

Council of Economic Advisors on, is how do we estimate the jobs 

across the full supply chain. And we can do it for pieces, and we 

will provide you with the pieces where we have good data. 

Mr. THOMPSON. Thank you. Thank you, Mr. Chairman. 


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Chairman LEVIN. Mr. Thompson, excellent question. And I hope 

that we will have that information as we discuss specific legislative 

proposals. 

Mr. Nunes, I think it is now your turn. 

Mr. NUNES. Thank you, Mr. Chairman. Mr. Mundaca, I want to 

follow up just quickly on what Mr. Thompson was talking about. 

Those—I think, to use your words—he said ‘‘incentivize,’’ or you 

said that these are incentives for manufacturing these green technologies? So these incentives—yes. Wouldn’t those be the same 

thing as, say, incentives for domestic oil producers to produce oil 

here in this country? 

I guess my question is, why is it—what’s the difference? Why is 

it okay to have incentives for green technologies, but—I think you 

said a little earlier that to incentive the oil industry, that that has 

no effect on domestic oil production. 

Mr. MUNDACA. There are two points to consider, and what we 

considered when making these proposals. One is the effectiveness 

of what it is that we are proposing, what the effect of these incentives/subsidies are, and secondly, what they are trying to address. 

We feel, as a general matter of tax policy, the Tax Code should 

be used to incentivize or subsidize an investment where the market 

itself is not providing the proper incentives, where the cost of an 

investment isn’t an accurate representation of either the benefits 

or the cost of that investment. 

So, for example, on green technologies, what we don’t have built 

into the price is the positive externality, to use an economics term, 

of the lower greenhouse gas emissions, less pollution, et cetera, but 

we don’t—— 

Mr. NUNES. Well, I want to get into this. So that—I just had 

that quick follow-up, but I’m going to get into something similar on 

this. 

So, my question about—I want to discuss China here. And you 

are very concerned about how we’re losing our edge to China in 

green technology. 

Mr. MUNDACA. Yes. 

Mr. NUNES. So, I just—we often hear this, and there are rhetorical statements that we often hear repeated by the Administration 

in the news media, but I just want to go into a few. We never talk 

about the actual numbers, okay? So—and these are just quick 

questions here, and I am sure you’re aware of these, but I want to 

get them on the record. 

So, in 3 years, 2005, 2006, and 2007, China built 273 gigawatts 

of electrical generating capacity, while the U.S. built 32. You’re 

aware of that? 

Mr. MUNDACA. Yes. 

Mr. NUNES. Okay. Of the—225 gigawatts that China built were 

coal-fired power plants, 225 in 3 years; 40 gigawatts was hydroelectric; and only 5.5 gigawatts were wind and solar in China. You 

agree with those numbers? 

Mr. MUNDACA. I don’t know the specific numbers, but I—— 

Mr. NUNES. I think it’s from the energy information—— 

Mr. MUNDACA. Right, I think the general breakdown is as I understand it, yes. 


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Mr. NUNES. So, during those years, the U.S. added twice as 

much wind and solar as China, even though China added nine 

times as much energy as we did, right, during the same timeframe. 

Mr. MUNDACA. Yes. 

Mr. NUNES. Okay. So now, the Administration basically—and 

everybody—says that we are going to have to increase, in the next 

25 years, you know, to meet demand, we are going to have to increase our—I have the number here, it’s about 270 or so gigawatts 

in the next 25 years that we are going to have to—somehow we are 

going to have to get this energy from somewhere. 

So, I mean, we’re not doing a very good job, if you look at the 

gigawatts we produce in the last 25 years. So, for the next 25 

years, it just seems to me like—I mean do you guys believe that 

energy use and energy consumption is related to gross domestic 

product? 

Mr. MUNDACA. Yes. And when we talk about, as you stated, we 

are losing our edge to China, I believe those statements are made 

in the context of the manufacturing facilities that produce the clean 

technology. 

So, when a company is going out to buy the windmill turbines, 

for example, where can they look to purchase them? China has 

made huge investments in that sector of its economy, with respect 

to the manufacturing capabilities of—— 

Mr. NUNES. But you do agree, though, that GDP and energy 

consumption are tied together. 

Mr. MUNDACA. Yes. 

Mr. NUNES. So how is it when—I don’t want to—I’m just going 

to paraphrase what the President said before the—I think it was 

the San Francisco Chronicle during the campaign. But he said that 

under his plans, that energy prices would skyrocket. You remember 

that quote, right? 

Mr. MUNDACA. I don’t remember the skyrocket part, but I do 

remember a discussion of—— 

Mr. NUNES. Well, I know he used the word ‘‘skyrocket,’’ I know 

that. 

So, you believe that GDP is tied to energy consumption. The 

President says that, under his plans, that the energy crisis will 

skyrocket. How, if we’re going to increase prices of energy, how are 

we going to grow GDP? 

Mr. ROGERS. Maybe I could address this. If you take a look at— 

wealth creation is tied to productivity across the economy. It’s also 

tied to energy productivity. The United States is substantially more 

energy productive than China today, so the relationship between 

our GDP growth and China’s GDP growth advantages us. 

One of the things that we want to be able to do over time is to 

continue that advantage, to make sure that U.S. GDP growth continues with greater and greater energy productivity, because that, 

in fact, makes us more competitive, globally. It drives more wealth 

creation over time. And that’s where these innovation-driven energy agenda really comes to roost. 

What we are able to do is increase our productivity in the energy 

sector faster than a global economy, and create the—— 

Mr. NUNES. So my time is up. So with all the—I mean, but at 

the end of the day, the last 25 years and looking at the next 25 


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years, I mean we’re not doing anything but talking about how 

much energy we are going to create. And you know, at some point 

somebody is going to call this what it is. 

I mean it’s almost like we’re—the Administration is paying more 

attention to the actual tree, and they can’t see the forest through 

the trees. 

Mr. ROGERS. So this Administration—— 

Mr. NUNES. I mean we’re not—no nuclear plants, I mean, no 

major sources of power. I mean at some point—Mr. Mundaca said 

that GDP is tied to energy use. And if we don’t produce more energy, don’t you guys think we are going to have some serious problems? 

Mr. ROGERS. What this Administration has already done in the 

first 18 months is to re-establish the nuclear industry of the United 

States to fund, with a loan guarantee, the first nuclear power plant 

in the last 30 years. We are already on course to double renewable 

generation capacity in the first 4 years of this Administration. We 

are taking action now to actually change that equation that has existed, as you described—— 

Mr. NUNES. Right. So you are taking credit for nuclear power 

plants that were started under George Bush. But so—which is fine. 

But let’s not—I don’t want to get into a partisan debate here. But 

at the end of the day, China has 100 or so nuclear power plants 

on the drawing board, and we are talking about two. 

I mean, this isn’t a partisan issue here. I mean Republicans and 

Democrats got to figure out how we’re going to grow our energy in 

this country, our energy, not just our—it’s not going to happen 

through solar and wind, guys. Is it? You guys believe we can add 

all this energy with just solar and wind and two nuclear plants? 

Mr. ROGERS. Again, the Administration is on record for asking 

for loan guarantee authority to fund the next 10 nuclear units, 

again putting in place the dollars behind making the first nuclear 

plants happen in the last 30 years. We also are on the record and 

have committed the funds to more than double renewable capacity 

in the United States. 

Mr. NUNES. Right. But if we double renewables and we build 

10 nuclear plants, it still doesn’t get us to where we have to go. 

Mr. ROGERS. And dramatically increase the energy productivity 

of the U.S. economy, so that we continue to be an advantage 

against China in a global race to—for wealth creation for U.S. citizens. 

Mr. NUNES. Thank you, Mr. Chairman. 

Chairman LEVIN. It’s been, I think, useful. You went over, but 

I think a useful exchange. 

And now we turn to Mr. Larson. 

Mr. LARSON. Thank you, Mr. Chairman. 

Chairman LEVIN. And then Mr. Blumenauer will be next, and 

then Ms. Brown-Waite. 

Mr. LARSON. I want to thank you both for your testimony and 

your service to the country. 

And along a similar theme that has been struck as it relates to 

manufacturing—and I appreciate the efforts both by the congress 

and certainly by the Administration to invest in alternative forms 

of energy—I have a specific concern about fuel cell technology. 


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And again, I compliment the Administration, to the extent that 

they have moved forward in this area. But I would note in alternative fuels, with respect to projects that were funded through 48C, 

as you have discussed earlier, and in section 1603, only 7 programs 

were fuel cell-related, whereas in section 1603, over 350 projects focused on solar electricity. 

And while I clearly recognize the importance of other alternative 

fuels, I note that nations like Germany, nations like Korea, the 

aforementioned China and others, are moving aggressively forward 

in these areas. And while Congress has provided a health tax incentive, I would like to further understand the Administration of— 

the Department of Energy’s commitment along these lines, which 

is a value-added manufacturer that the United States really—we 

will lose manufacturing capability and our innovation capability if 

we continue to cede ground to other nations. 

Recognizing that transitions to a hydrogen economy may be down 

the road, but not that far down the road, and stationary fuel cells 

already are used in—all across our Nation, and it just seems to me 

that, especially with a value-added manufacturing base like this, 

that we need to have more of an emphasis there. Would you care 

to respond? 

Mr. ROGERS. Thank you, Congressman Larson, for that. The 

role of fuel cells is actually quite important. The stationary fuel 

cells and the efficiency that they bring today is actually something 

we were pleased that, under the 48C program, that UTC was one 

of the manufacturers who was successful in that. 

We would look forward to opportunities to expand fuel cell manufacturing capacity as part of an extension of 48C. It’s one of the 

areas where we would like more applications to be able to fund 

more manufacturing. We were quite limited, both in applications 

and in the ability to fund. 

And so, that’s a specific area where we see significant upside, 

particularly around the stationary fuel cell capability. This is an 

area that you have been quite helpful in your leadership on, and 

the Secretary clearly understands the role that those can play, and 

the efficiency of those technologies now, and the innovation that 

that technology can support, going forward. 

So, clearly something that we understand the role of. We would 

like to see more of it in the portfolio. Right now we are actually 

limited, in terms of the dollars, as we looked at the manufacturing 

side of that, and would welcome the opportunity to work with the 

Committee to extend that. 

Mr. LARSON. Are you—excuse me, Mr. Rogers—is there something we should be doing, as a Committee? Are you suggesting that 

there is more that we could do in this area, specifically, as it relates to manufacturing in this vital—— 

Mr. ROGERS. The specific thing that we could do is the President has asked for $5 billion in addition to—which would enable 

us both to fund more of the applications that originally came in 

that were good applications that we were unable to fund because 

we only had $2.3 billion in manufacturing. So we have actually already gone through the process of ranking the rest of those, and 

so we could move that out the door quite quickly. That’s one block. 


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And, as we go forward, we have the opportunity to target sectors 

that were under represented in the first round of solicitations in 

the next round of solicitations. 

Mr. LARSON. Well, I hope you will consider fuel cells, in that 

they were vastly under represented in the awards that were made. 

And I look forward to working with the Administration on that. 

And I don’t know if Mr. Mundaca would like to respond—— 

Mr. MUNDACA. Not much to add, except again to continue to 

make the plug for the additional funds for the extension of the 48C 

program. We think it was very successful. We did leave a lot of 

great projects on the table. We know there is interest from people 

who didn’t apply to come back forward now. 

So, again, we would greatly encourage the continued leadership 

of the committee on this issue. 

Mr. LARSON. And, last, I know we’re going to hear from another 

panel, and particularly from Boone Pickens, but the Administration’s position on natural gas and the great resources that we have 

in this country—most recently, I guess, statements from people like 

Morgan Stanley, that there are being close to 200 years of reserves 

in shale. 

Mr. ROGERS. The U.S. natural gas resources are an extraordinary endowment, one with—and it’s been one of the most exciting 

developments, really in the last decade, is the depth of the resource 

that’s available here, in the United States. It is clearly part of the 

U.S. solution for a long time to come, and we are quite excited 

about the developments that have occurred here. 

It is one of the less-told stories. The Department of Energy spent 

10 years investing in unconventional gas technology. In the nineties the industry said, ‘‘Hey, this is pretty good,’’ and it was ready 

to go, and the industry took it from there. And it’s been a great 

collaboration between government and the private sector, to open 

up vast new resources. 

Mr. LARSON. Thank you. 

Chairman LEVIN. Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. I would just 

begin by seeking your help to assist Mr. Camp in finishing his 

chart, which I thought was very useful, but it doesn’t tell the story 

about what has happened in the course of the last 2 years. He has 

a little tiny increase in renewable energy, but he doesn’t talk about 

what the impact was in installed energy. Installed energy in the 

last 2 or 3 years, we have seen renewables go up dramatically. We 

haven’t seen any new coal plants. We haven’t seen nukes in 25 

years or more. No new hydro. 

But what we have seen—my understanding is, and there is some 

great information from Pew; I know you have it—if we could just 

have the next chart that talks about what’s happened with the incentives that we have had through the Tax Code, through the economic recovery package, that has produced something like 22.5 percent compound increase in wind, for instance, in the United States. 

That’s the story. I think it’s three times renewables over coal in 

2009. 

So, let’s—if we could help Mr. Camp finish the chart, I think it 

would illustrate why what we’re talking about is so important. 


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I am pleased in your testimony you talk about re-implementing 

the superfund tax. As it happens, I have legislation before this 

Committee that would reimpose the superfund tax that was allowed to expire, and has turned our superfund program into a stall, 

sue, and study program. And all of us have superfunds in or near 

our district sites that could benefit from this. I am hopeful that you 

will work with us on the Committee, so that we can have a hearing 

and get busy on enacting this specific provision that you are interested in. 

In the main, I think those proposals make a lot of sense. I would 

ask for some evaluation about one of them, where you’re talking 

about taking away the deduction for tertiary injectants, because we 

are in a—have a serious problem dealing with coal, carbon capture, 

and sequestration. This is an example of where some in the petroleum industry are able to sequester carbon, squeeze more productivity out of existing wells, and we are removing it from the atmosphere. 

I think we have the potential of learning a way to deal with coal 

capture and—carbon capture and sequestration. This might actually be a negative. And I would respectfully request that you help 

us analyze what the impacts are. 

I have got a concern about the way Treasury is valuing certain 

grants in lieu of the solar ITC. And because time is limited, I won’t 

bother you with it now. But I would like to submit a vexing question that I got from one of my constituents about trying to make 

this program work, and being able to discuss this with your staff 

to see if we understand it right, he understands it right, and what 

might come forward. 

Finally, I am—I have legislation, H.R. 4599, to create a direct 

payment program for the Recovery Act section 1603. I don’t think 

we are going to be in a position where we want to just have a grant 

that may or may not continue over time that can be disrupted and 

actually doesn’t necessarily go as broad. 

The legislation I have would make it possible for other potential 

investors to be involved, like real estate investment trusts and taxexempt entities opening up new avenues of capital. And I would 

love to have a chance to work with you folks in the Administration 

to analyze whether this might be a way to be able to do it more 

efficiently, expand the number of players that are involved, and do 

something that might be a little better in the long run than the Recovery Act’s grant program under 1603. 

And I welcome any comments that you would have about reimplementing the superfund or other aspects touched on in sort of 

this fuselage that I have thrown your way. 

Mr. MUNDACA. Well, thank you for that, Congressman 

Blumenauer. A couple of things. You raised a lot of very good 

points. 

On tertiary injectants, there are other incentives for carbon sequestration technologies. We should work together to make sure 

those are operating properly, and perhaps there is a way to have 

the tertiary injectants proposal, which we have, as you mentioned, 

proposed to repeal, work properly with the carbon sequestration incentives we would like to make available. 


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On, I think, the issue you raise under 1603 with respect to certain solar projects and valuation, we are aware of that issue. I believe there are meetings at Treasury today with an affected taxpayer who is questioning the methodology used for valuation. We 

will continue to engage on those, but welcome the opportunity to 

brief your staff and engage on that, if you would desire. 

And then, as well, with respect to 1603, yes, we would very much 

like to speak about if there is a way to have that program made 

more effective. 

Chairman LEVIN. Thank you very much. Ms. Brown-Waite. 

Ms. BROWN-WAITE. Thank you, Mr. Chairman. And I thank 

the gentlemen for being here this morning. 

The Senate climate bill now is apparently going to have some increases in gasoline taxes. Where is the Administration on this proposal of increasing gasoline taxes? And either one of you could—— 

Mr. ROGERS. We haven’t seen the Senate climate bill as yet, so 

we are looking forward to it, as I’m sure this Committee is, as well. 

And at that point we will be able to evaluate the various elements 

in it. But we are not familiar with the provisions, currently. 

Mr. MUNDACA. Yes, we haven’t seen it yet, and we will assess 

it in the context of looking at the overall bill. 

Ms. BROWN-WAITE. Okay. So the Senate, in a vacuum, has 

come up with this. They haven’t consulted with Energy Department at all. Is that what you’re telling me? 

Mr. ROGERS. We have, from time to time, had conversations 

with various senators about various provisions, but we are not familiar with the provisions of the Senate bill that you described, and 

specifically the gasoline tax provisions. We read about them, too. 

Ms. BROWN-WAITE. Well, at a time when, you know, the economy is struggling, this would be the least positive time to ever add 

a tax increase on gasoline. 

The other question I have is I have a nuclear power plant in my 

district. And they have applied for an—to build another one about 

10 miles away, also in my district in Florida. And what they wanted to do to ‘‘create jobs,’’ because I thought that’s what this Administration was about, they sought permission to do some pre-construction, basically ground moving, and were denied. 

How can we say that we are encouraging nuclear power, when 

this kind of obstruction exists in the building, in the construction 

of nuclear power? 

And then I have another question about a tax break. So if either 

one of you gentlemen would like to, respond to that. 

Mr. ROGERS. So I’m not familiar with the specific decision in 

the case of the plant in your district. I am aware that the works 

are actually being constructed on several nuclear power plants in 

the United States currently. And so I suspect there are some 

unique situations there, but I’m not familiar with the specific case 

you cite. 

Ms. BROWN-WAITE. It happens to be Progress Energy. If you 

would like to look into it and get back to me, I would appreciate 

it. 

The other thing is I’ve got several small renewable diesel refineries. I have one in my district and another one near my district. 

And the owners of these two businesses were led to believe that if 


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they bet their life savings to invest in renewable energy, that the 

tax credits would be there to make this business model viable. 

Well, we all know the Senate failed to pass the extenders bill. 

And many of those businesses actually had to stop production of 

that renewable diesel almost immediately, and the other one has 

limped on for months. The owner that was contacted, his name is 

Stu Lin, and he has tapped his remaining savings to service the 

company’s debt and keep 30 people working for him, off the unemployment rolls. 

After speaking with Mr. Lin on Tuesday, the issue became crystal clear. Here is what he said to me, and I’m going to quote him, 

‘‘If extenders aren’t done in 30 days, I am closing my doors. I am 

not kidding. I have tried my best. I just cannot rely on the government as a business partner any more.’’ 

And he went on to say, ‘‘The government makes a big deal about 

consumer confidence surveys. Why on Earth would 30 guys working for me have any confidence?’’ 

You know, I think we need to realize that when we’re talking 

about jobs, it’s important that, you know, it’s not just talking about 

them, but helping out there in the private sector to create these 

jobs. Now, obviously, these two firms are—had created jobs. One of 

them is still holding on to 30 employees. 

But when I’m back in my district and people say to me, ‘‘Where 

are the jobs,’’ I tell them, ‘‘Unfortunately, it’s up here in Washington, because the bureaucracy is growing.’’ It’s not the private entrepreneur down there who is getting any help. 

Could—I would like to hear from you. And I know that this is 

a follow-up to Mr. Doggett’s question. You know, why aren’t we 

pushing this more? Why isn’t the Administration pushing that 

more in the Senate so that these businesses can continue? 

Mr. MUNDACA. Thank you for that. I share your desire to move 

the extenders bill as quickly as possible, and we are doing all that 

we can. I think if you have suggestions about what more we can 

do, we are certainly willing to talk. 

But we would like that bill to be completed as soon as possible. 

We have had some encouraging signs. But again, I think there are 

still major issues with respect to offsets that need to be discussed. 

We have been involved in those discussions in trying to supply as 

much as we can to move this forward. 

But again, I do share your desire to get that bill done, and on 

the President’s desk as soon as possible. 

Ms. BROWN-WAITE. These are real jobs. Thank you, Mr. Chairman. I know I went over a little bit. 

Chairman LEVIN. Okay. If I might add, I am hopeful that the 

extended bill could pass before Memorial. And I would hope we 

could have bipartisan support for it, which hasn’t been true. 

There is the issues which need to be worked out, but clearly that 

bill—which has now passed the Senate, as well as having passed 

the House—needs to be worked out. And we are trying very diligently to work out the issues and see if we can pass it here in the 

House, and to pass it in a—one form or another. And the Senate 

is going to require 60 votes there. And I would hope we could work 

together on a bipartisan basis. 


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Up until now, the extended bills haven’t passed on a bipartisan 

basis here, and it did pass in the Senate with, I think, five or six 

Republican votes. So let’s work on it, and try to get it done well 

before Memorial break. 

All right. Next—and thank you for raising that—next, Mr. Kind. 

Mr. KIND. Thank you, Mr. Chairman. Thank you for holding 

this important hearing, and I want to thank our witnesses for your 

presence and testimony here today, and the Administration’s 

strong support in trying to work with us and the American people 

to develop a new energy policy for a new century. And one way of 

doing it is obviously through tax incentives and the code that we 

have working with us. 

But even outside of the issue of climate change or global warming, this is the right thing to do for our Nation, as far as getting 

the economy back on track, creating good paying jobs, for national 

security implications, to be better stewards of the natural resources 

that we have, and empowering people in their own communities, so 

they have more control over their energy destiny. And through a 

combination of this, and hopefully working in a bipartisan fashion—not only on the extenders bill, but also hopefully with a future 

tax incentive bill that we will have coming up before this Congress—and working with the Administration, we can put those policy proposals in place in order to achieve the desired results. 

Let me just cite a quick study for you. And I want to ask both 

of you for your comment on this. But last year McKinsey and Company issued a report which states that the U.S. could cut its energy 

use up to 23 percent below the projected U.S. demand level by 

2020, just by boosting efficiency, and saving over $1.2 trillion in energy costs. 

And I believe one of the best ways to create jobs and improve energy efficiency is by creating incentives for conservation like energy-efficient retrofits such as is the basis of a couple of bills that 

I have introduced, one with Mike Thompson, H.R. 4455, Expanding 

Industrial Energy Efficiency Incentives Act, and H.R. 4226 that I 

have introduced with Representative Reichert from Washington, 

Expanding Building Efficiency Incentives Act, just by creating the 

incentives for buildings to be more energy efficient, improving the 

bottom line of most companies, which I think is going to lead to direct job growth, then, which is exactly what we need in this country. 

And I am wondering what the Administration’s position is on incentives for increased building efficiency, as being offered in a couple of the bills that I have cited, and other ideas that are percolating around here. 

Mr. ROGERS. Energy efficiency is sometimes referred to as the 

first fuel. It is the highest return investment that we can make in 

reducing greenhouse gas emissions, and in reducing our dependence on foreign oil and other sources that are at risk. 

So, clearly, a focus on energy efficiency is enormously important. 

The President has talked about the Home Star program, and I understand that that’s actually ready to be introduced here in the 

House today. 

The opportunities in the industrial sector are enormous. One of 

the programs that we funded additionally under the Recovery Act 


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are a set of industrial energy efficiency audits that go out and give 

businesses, if you will, ‘‘Here is the menu of investments that you 

can make.’’ These turn out to be high-return investments for businesses. One of the great things is if you give a business owner a 

way to save money, they act on it very, very quickly. And so it’s 

one of the things that we have been quite excited about. 

Same thing is true in the building sector. We have a building 

stock that is not efficient on a global basis. Where the investment 

opportunity puts money back in people’s pockets, it makes the environment cleaner. And so these are high-return investments for the 

U.S. economy. I actually worked on some of the earlier pieces of 

that in my former life, and believe that this is one of the highest 

return investments that we can make, as a Nation. It makes us 

healthier, it makes us wealthier, it makes us safer, all at the same 

time. 

Mr. KIND. Well, I have been in conversations. Obviously, one of 

the largest manufacturers in my district in western Wisconsin, a 

train company producing high efficiency chillers, and they indicated to me that with the right incentives, there is no reason why 

that plant can’t expand, create jobs right in the domestic market 

in order to meet an increasing domestic demand, as long as, you 

know, the standards for efficiency get updated and the incentives 

are in place. So, again, I think this is a tremendous opportunity for 

job creation right in my area. 

But what I have also noticed in western Wisconsin is an increase 

in investment and production of biogas, methane gas from landfills 

and that. What is the Administration’s thought as far as that being 

a part of the energy puzzle that we’re moving forward on? 

Mr. ROGERS. So two observations. First, the—one of the opportunities we had under the 48C program was to invest in at least 

25 different appliance manufacturers, because the opportunities, 

whether it’s air conditioning or consumer appliances to improve efficiency, is very, very high. And the U.S. has a set of the leadership 

positions in these technologies. We really want to extend that. 

In terms of biogas, clearly an important part of the equation, 

both from the energy side and from the environmental side. The 

methane emissions are quite large. That has serious CO 2 implications. And so again, you get a double benefit: you reduce pollution 

and you improve the energy balance. And the technology has 

moved a long way to making that compatible, just with the existing 

gas grid. 

Mr. KIND. Let me finally ask you—I wish I’d brought the article 

along; I just read it and I forgot—it was a Wall Street Journal 

about how Europe is way out ahead of us in regards to landfill use 

for energy purposes, and why the United States is lagging in that 

area. And I guess maybe we can follow up with you at some point 

and find out why that is, because I think we’re missing a great opportunity here. 

Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you. Mr. Pascrell. 

Mr. PASCRELL. Thank you, Mr. Chairman. Mr. Chairman, the 

credit we have been talking about here in section 1603, Mr. 

Mundaca, the sole requirement to get the credit or grant is that the 

alternative energy facility be in the United States of America. 


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That’s the sole requirement. There is no incentive, there is no requirement, for domestic content that I can find. Taxpayer dollars 

have been and are being used to fund the purchase of foreign-manufactured goods and components for use in such projects. 

I want to go back to what my good friend from Wisconsin just 

talked about. How can you have an energy policy and you not have 

a manufacturing policy? It would seem to me that both of them go 

hand in hand, that if you do not have a strong manufacturing national policy to stabilize the base of the infrastructure, the infrastructure continues to crumble and continues to be out of the 21st 

Century and still back in the 19th century. 

I think that this is a critical message to take back to the Administration, that they must develop a manufacturing policy to ensure 

manufacturers in this country that they are serious about this, that 

this is not simply an esoteric thing we’re talking about, when we 

talk about energy policy. 

In light of the reports of foreign parts making up the bulk of 

1603 projects, what steps is the Administration taking to see that 

a domestic content incentive or requirement is included as part of 

the 1603 program, going forward? 

Mr. MUNDACA. Thank you for raising those important points. 

Again, the Administration did and does recognize the importance 

of addressing the manufacturing aspect of this, the supply side, not 

just the demand. 1603, as you mentioned, is the demand. You’re 

buying the components. The 48C that we have been talking about, 

that the Administration is proposing to more than double, is with 

respect to the construction in the United States and the manufacturing facilities that are going to supply the components that people need to transition to clean energy. 

Mr. PASCRELL. Well, what would it take to provide in 1603 

such a provision? Because, you know, I can cite some projects 

under this 1603, these projects, where most of the parts of that 

particular project came from China, or came from another country. 

I don’t see what the purpose of that is, if we are trying to create 

jobs here, and trying to strengthen our manufacturing policy. 

Now, look. You can talk all you want about strengthening the 

manufacturing policy. I am asking you a very direct question. Show 

me where you’re talking more—you’re doing more than talking, 

this Administration, about establishing a manufacturing policy 

whereby—and I will repeat, if I may, Mr. Chairman—you are stabilizing the infrastructure of the manufacturing sector of our economy. Show me. 

Mr. ROGERS. So when the Vice President asked for the additional $5 billion for the 48C program, he explicitly did that in the 

context of a view that said we have to grow domestic manufacturing. It is not enough just to grow domestic development. We 

have to grow development, manufacturing, and innovation together, because unless we do that, all of a sudden we innovate and 

the jobs go overseas, or we develop and we import. 

So, it is clearly the Administration’s position that we need to be 

making that investment in manufacturing. That is why we have 

asked for the additional funds. 

Mr. PASCRELL. And it would seem to me to make sense, then, 

based upon what the Vice President has said, that we provide a 


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portion of 1603 to direct that those parts be manufactured in the 

United States of America. Otherwise, we are defeating the very 

purpose of what we are trying to do. Aren’t we? 

Mr. ROGERS. The vast majority of parts under the 1603 program are, in fact manufactured in the United States. And what the 

48C program is doing is enabling us to raise the domestic content, 

systematically. 

The challenge that we face is if we were—the U.S., particularly 

against certain components, has significant limitations in domestic 

manufacturing capacity today. So if we were to impose a buy American provision on it, what it would do is it would actually restrict 

the number of projects that we can do. Our task is to grow that 

manufacturing base. 

Mr. PASCRELL. Mr. Chairman, I hope you were listening to the 

very distinguished panelists, both of them that we have. They are 

saying that we don’t—he is saying that we don’t have the capacity 

to build the parts that we need in manufacturing in this country, 

which is my very point, because we have shut down manufacturing 

in this Nation, for a number of reasons—which is not the subject 

of this panel. 

But what the gentleman is saying—what Mr. Rogers is saying; 

excuse me—is that we don’t have the capacity, even to manufacture 

these parts. And yet we know we had the capacity to manufacture 

these parts at one time. We don’t have a manufacturing policy, Mr. 

Chairman, period. And we can’t compete with China unless we do 

that. 

Chairman LEVIN. And the purpose of 48C is to help develop a 

manufacturing policy in the U.S. And we will talk another time 

about what requirements there may be in terms of our WTO obligations. That’s a different issue, though it’s a very relevant issue. 

So, if we might go on—and we will talk a lot about it—48C is 

an effort, a major effort, to develop what has not been true here, 

a manufacturing policy for the United States. 

Now, let me suggest this. Those who haven’t questioned have 

been very patient. I think this is going to work out okay. We are 

supposed to start the next panel at 1:00. We are supposed to have 

a lunch break. There is lunch available for those who want to grab 

it across the hall. And I’m not sure when the votes will be on our 

tax bill. It’s a Ways and Means bill that’s on the floor now, I think, 

and that’s why I think Mr. Camp is not here. 

Mr. DAVIS, you are next. 

Mr. DAVIS of Kentucky [continuing]. Thank you, Mr. Chairman. 

I think Mr. Pascrell brings up a very germane point on the issue 

of slating manufacturing and energy policy together. 

I have a very strong belief, based on my professional experience 

in manufacturing, that we do have the capacity to produce these 

parts. But from a regulation and energy standpoint, it’s prohibited. 

You know, one statement that I think ties in Mr. Nunes’s comments, that are very complimentary to what Mr. Pascrell said, is 

that—dealing with the issue of increasing GDP and increasing energy costs at the same time. You can’t do that. It’s not possible. 

You know, when the President made the statement that his cap 

and trade program would ‘‘necessarily cause utility rates to skyrocket,’’ he has moved to enact on that, but what we’re seeing, in 


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fact, is a reduction in manufacturing capacity, to Mr. Pascrell’s 

point, in the very heavy industrial areas, the machine tool operation areas, that would complement the so-called green energy program. 

And I think we run into a substantive issue here, that alternative energy is multiples of three, four, or five times the cost per 

kilowatt hour for industrial electricity to produce these same goods. 

If I could shift subjects slightly to another aspect of industrial 

energy, the EIA has predicted that OPEC will have increased influence over the world market in 2010 and 2011, basically because of 

decreased production from the non-OPEC markets, including the 

United States. In the short term energy outlook, they go on to state 

that OPEC’s share of world liquid fuels market is going to grow to 

a stunning 42 percent by the end of next year. And, in addition, 

what that would do is increase their ability to increase prices, because they control more of the supply chain. 

Well, I’m glad the Obama Administration has shown some interest in expanding our offshore production. I’m a little confused why 

the vast majority of our resources are still off limits, and I am concerned about this, in conjunction with the reactionary restrictions 

on coal mining permits, and the Administration-backed proposals 

that support $39 billion in tax increases on fossil fuels over the 

next decade. It’s only going to hamper our effort to reduce dependency on foreign energy and maintain affordable electricity for millions of Americans. 

Coming from a part of the country that has among the lowest 

utility rates in the Nation, our senior citizens are being faced with 

an across-the-board 40 percent rate proposed increase because of 

these very regulations right now. 

Here is my question for Mr. Rogers. Do you think that restricting 

and limiting domestic energy production from proven energy resources like coal, and increasing taxes on domestic fossil fuels, will 

better enable us to reduce our dependency on foreign energy? 

Mr. ROGERS. I think the set of programs that we are beginning 

to put in place under this Administration go a long way toward reducing our dependence on high-risk sources of energy. 

Mr. DAVIS of Kentucky. I—— 

Mr. ROGERS. We have made a set of commitments to restructuring the transportation sector and changing the fuel mix in ways 

that will drive down gasoline demand. 

Mr. DAVIS of Kentucky [continuing]. If I could reclaim my time, 

sir, just one question. You talk about higher-risk sources of energy. 

How is it going to be—I’m trying to understand. Are you putting 

coal, which is the majority of energy production in the United 

States—are you going to say that’s high-risk energy production? 

Just yes or no. 

Mr. ROGERS. There is a good deal of pollution risk from coal. 

There are important risks on different sources of energy. But clearly, coal is a risky energy source. 

Mr. DAVIS of Kentucky. Even though coal production will comply with EPA clean air standards. 

The question then, though, that you haven’t answered is, by limiting their production, how are you going to enable us to reduce our 

dependency? 


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If I see my constituents having a 30 or 40-percent increase in 

their utility rates, that’s not having a positive effect on the region 

that actually makes goods and produces energy and grows food in 

the United States. I am trying to understand this. Mr. ROGERS. So under the Recovery Act, we are investing $3.4 

billion to try to demonstrate that carbon capture and sequestration 

is economical within the next decade. So we are clearly trying to 

make sure that the coal that we produce in this country we can use 

in this country, both economically and environmentally and in appropriate fashions. 

So—and I think the other part is if you take a look at the broad 

base of proposals we put forward, driving energy efficiency across 

the board for American homeowners, should reduce homeowner 

bills and—— 

Mr. DAVIS of Kentucky. If that’s the case, then, every Democrat on the Committee voted against the $7,500 tax credit for the purchase of energy star-rated home energy items in the stimulus bill 

last year in the energy title. It was my amendment. And I think 

there is a dissonance in terms of the stated priorities and what is 

actually being put in operation. 

I think, finally, you know, if you feel that sacrificing fossil fuels 

for green energy is necessary, I think the real question is why 

would the Administration choose to pick winners and losers when 

the technology is clearly not there, A, to provide this cost incentive? 

And then, B, just as a follow-up, why, in fact, would we impose 

these increased rates, saying that it, in fact, is going to cut overall 

costs, when in fact it creates a disincentive for investment? 

Chairman LEVIN. I think, Mr. Davis, your time is up. If you 

don’t mind, let’s move on so everybody can finish, unless—well, 

how about 10 seconds’ worth, Mr. Rogers. 

Mr. ROGERS. The good thing is we’re not choosing winners and 

losers. We’re running a great competition in the history of American entrepreneurship that has really created a competitive playing 

field across innovative technologies that will position the United 

States for long-term leadership across a range of energy technologies. 

Chairman LEVIN. All right. Some liked your answer, and I think 

some probably did not. 

Mr. DAVIS of Kentucky. Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Crowley, you are next. And then, Mr. 

Davis, you are next, unless two others come before your turn. 

Mr. Crowley. 

Mr. CROWLEY. Thank you, Mr. Chairman. Let me first thank 

you for continuing this Committee’s and this congress’s vote to develop incentives for our Nation to wean itself off of foreign oil. 

Pollution is an issue. We need to create green jobs in the new 

economy. Like Democrats said in the nineties, it is vital. But I believe the most important reason is our national security. The more 

we export our dollars to hostile oil-producing nations, the more we 

export our security and our national sovereignty. Green jobs isn’t 

just a cute catch phrase, it’s one of the most important national security actions we can take. 

And I want to start my questioning about the programs set up 

by the Federal Government to increase domestic production of 


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green energy at home, and create jobs here in the U.S., while having the great effect of weaning the U.S. off of foreign oil and making us more energy-independent. 

One program encourages green manufacturing domestically, including—that’s what my colleagues have alluded to—legislation 

that I am in the process of developing with Congressman Scott 

Murphy of New York, who is both a businessman who has realworld experience in creating jobs in this country, but also someone 

who sits on the House Armed Services Committee, and knows the 

threats that our Nation faces every day. 

Assistant Secretary Mundaca, how did Treasury, with the consultation of the Department of Energy, determine which projects 

would be chosen for the 48C domestic manufacturing program that 

was alluded to throughout many questions this morning? I have 

noticed a lack of awarding to the fuel cell community, as Mr. 

Larson alluded to earlier. Was there a list of those that had previous private sector venture capital investment consideration? 

I believe that the American Government should help incentivize 

private sector manufacture in the U.S. So what were the lessons 

that were learned in this process, both positive and negative, from 

this tax incentive program? And before you answer that, I just 

want to—because time is—so keep that in the back of your mind, 

and time is of the essence here. 

I want to get—my other question is I want to touch on the issue 

of ethanol, which was discussed privately before, and the Government incentives for the ethanol program in the Tax Code. Last year 

I introduced the Affordable Food and Fuel for America Act, which 

would phase out the $5 billion a year subsidy for gasoline refiners 

who blend corn ethanol into gasoline, eliminate a tariff on imported 

biofuels, and increase funding for the cellulosic biofuel production 

tax credit. 

I introduced that bill because I am concerned about the impact 

of the subsidy on our food prices, as well as our overall deficit, and 

as well as the impact that it has on green energy. 

As the renewable fuels standard requires oil companies to buy 

and blend 12 billion gallons of ethanol into gasoline this year, and 

15 billion gallons in the year 2015, we already have a mandated 

requirement for the consumption of ethanol in the U.S. So is this 

tax incentive for the production of ethanol still needed? 

And, if you could, answer both those questions. 

Mr. MUNDACA. Well, thanks. I will try to be brief. We look forward to working with you. This issue on ethanol has been raised, 

as you know, by a number of different congressmen, and we look 

forward to engaging on this as we take forward a more comprehensive review of energy policy and energy incentives in the Tax Code. 

I am sure Mr. Rogers will have more to add on the criteria used 

for the 1603 program. We follow the statutory provisions that—we 

looked to a number of criteria in assessing the projects. As we mentioned, we had a lot of great projects that didn’t get funded, not because they weren’t good projects. You know, we simply ran out of 

money, which is why, on the 48C, we are looking to get additional 

money for that. 


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Fuel cells were some of the projects that were not funded but, 

again, technically met the requirements, just didn’t get the funding. 

Mr. ROGERS. And just quickly on the process, this was a broadbased competitive peer review process. We had almost 400 reviewers involved. We had technical reviewers, we also had business reviewers. And so each proposal got three reviews. Those that made 

it across a certain threshold then went through a set of peer— 

merit review panels to get two more reviews before we could make 

the final selection decisions. 

And then, the only other piece that we layered on was the—on 

the margin we tried to make sure that we were focusing marginal 

dollars in high unemployment districts. And so, as a policy factor, 

what we tried to do is if the manufacturing facility was in a high 

unemployment area and it was on the margin, we brought it in. 

Mr. CROWLEY. Let me just ask if you can further define a ‘‘high 

unemployment area.’’ Was that areas that had job loss recently, or 

was it communities that have sustained job loss over a period of 

time, many years, considered as well in that? 

Mr. ROGERS. We were looking at the absolute unemployment 

rate in each of the different counties that—— 

Mr. CROWLEY. As defined by the Department of Statistics, 

or—— 

Mr. ROGERS. As defined—I believe it’s a Department of Labor 

statistic. 

Mr. CROWLEY. That’s what I’m saying, labor statistics. So, 

okay. I would like to talk a little more about that with you at some 

other point, and not to take up the Committee’s time. But thank 

you, Mr. Chairman. 

Chairman LEVIN. Under the rules, Ms. Schwartz is next, and 

then Mr. Boustany. We know you have to go to the floor. So 

you—— 

Ms. SCHWARTZ. All right. We will try and do this relatively 

quickly. Two points I wanted to make, and I wanted to thank you 

for your testimony. I actually feel like this should be a little more 

exciting hearing, and—because I think some of the comments you 

have made are really important in how we are really moving ahead 

toward a cleaner, greener economy, and the producers of alternative sources, and it does it in a smart way. 

So, I think we should be—I think, Mr. Rogers, you actually expressed this several times, about what the future brings and how 

we’re really moving in a very different direction. While continuing, 

obviously, to use fossil fuels, we are really looking in other ways, 

both through clean technology and also energy efficiency. 

So, one quick comment and then—which I would like you to consider. Some testimony has been submitted by some groups I have 

been working with on—they’re usually referred to as historic tax 

credits. We are interested in—and I have been working with them. 

I have legislation to modernize the historic tax credits. 

One of the best, most efficient things we can do is use older 

buildings, rather than build new ones, and I have—one of the 

pieces of my legislation actually provides additional incentives for 

more energy-efficient retrofits of older buildings. I think this fits in 

very well with what the Administration is trying to do. I would ask 


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the Administration to take a look at that, in working with the 

Committee, to possibly move ahead. Love that to fit into one of 

these pieces of legislation, moving forward. 

Also, renovation of older buildings actually creates good jobs. It’s 

reuse. We ought to make them more energy efficient at the same 

time. So I would ask you to take a look at that. 

The other piece I wanted to talk about was really being able to 

extend the 1603 provisions to bio-refineries. I mentioned this to 

both of you earlier. You had talked about how important the 

biofuels production industry is, can be, should be, in terms of really 

adding job growth and also real economic value, and really using 

not food sources, but biomass that would be able to be turned into 

cleaner energy. We know that there are a number of industries— 

some in Pennsylvania—that are moving ahead on this. 

One of the barriers is the high cost of building refineries. My understanding is, looking through the list of the very successful use 

of 1603, is that it has not been used for bio-refineries, and it’s not 

really able to be. 

So, my real question for you to look at—again, whether we could 

do that in legislation moving forward here or in any jobs package 

or in a future energy bill—is, is there a way for us to use tax incentives and grants, particularly in lieu—these are not companies that 

are making money, and so they really need to be able to get—use 

some of these kinds of provisions—for them to be included, these— 

the building—really moving to production. 

This is for other kinds of biomass. We know this is potentially 

a great source of homegrown clean energy. And I want to see us 

be able to move ahead, use some of these tax provisions. And I 

think, Mr. Rogers, if you could, just briefly answer how you see 

that fitting in to some of the provisions we already have used so 

successfully in other areas. 

Mr. ROGERS. So, first observation is that the 1603 and 48C programs, again, are among the most successful programs under the 

Recovery Act for job creation. 

Another program under the Recovery Act has put more than 

$600 million into 19 biofuel facilities to really establish the economics of cellulosic and next generation biofuels. The ability of the 

United States to take a leadership role—biofuels are enormously 

important for what we’re trying to do in the transportation sector. 

The ability to reach the next generation of biofuels with the new 

technologies available is a very exciting area of innovation that we 

have been funding with the grant programs, and we would be 

happy to work with Congress to figure out what the appropriate 

tax structures are to move that forward. 

The only other observation I would make is our general counsel 

has worked very closely with the states on historic preservation, 

trying to make it easier to do energy efficiency in historic buildings, 

and we have actually established some things with the Council of 

Environmental Quality to make that much easier for historic buildings. And so we would be happy to work with you on that, as well. 

Ms. SCHWARTZ. That would be great. Thank you very much, 

and I yield back. 

Chairman LEVIN. Thank you. 

Mr. Boustany. 


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Mr. BOUSTANY. Thank you, Mr. Chairman. Mr. Mundaca, let 

me start with just a yes or no question. Is it the official position 

of the Obama Administration that we have an over-production of 

oil, U.S. oil? 

Mr. MUNDACA. I don’t think there is any official position on the 

level of production of oil. 

Mr. BOUSTANY. Well, because it’s in your written testimony, it 

is riddled throughout the budget proposal. And also, I received a 

letter from Secretary Geithner about a year ago that has the same 

statement. It basically says, ‘‘To the extent that credits’’—referring 

to fossil fuel credits—‘‘encourage over-production of oil, it is detrimental to long-term energy security.’’ So, I find a little bit of an inconsistency here, and I have deep concerns. 

We all want to get to a comprehensive energy policy. We know 

there are some very exciting biofuel possibilities down along the horizon. But the key question for this Committee is the transition 

strategy. How do we transition? And we need to have a realistic 

transition strategy. 

And, Mr. Rogers, I was very encouraged to hear that you are excited about the new developments of shale, natural gas. And I 

think many experts in the field believe that natural gas is going 

to be a key component of our short-term transition strategy. 

So, is it the position of the Administration to penalize American 

natural gas production? That’s my next question. 

Mr. MUNDACA. With reference to the tax provisions, again, as 

I have mentioned, what we are seeking to do is remove those subsidies from the Tax Code that we think are inefficient that—— 

Mr. BOUSTANY. I have heard that. But I think there is a little 

bit of a disconnect, as probably has been mentioned by Mr. Tiberi 

and others earlier, in that when you talk to our independent oil 

and gas producers, these are the small companies. These are the 

ones that have been responsible for a lot of our domestic production, whether it’s oil or gas—and particularly, natural gas now. 

They are going to be penalized by these provisions. 

I have talked to a number of companies and just to put it in real 

terms—this is anecdotal, but I suggest you really need to go and 

listen to these folks. A small producer says, ‘‘I will produce 10 gas 

wells under current law.’’ If these tax provisions, a repeal of these 

certain tax provisions occurs as proposed in the Obama budget, I 

will go from 10 wells to 1 well. So that’s going to hurt our natural 

gas product of which—97 percent of it is domestically produced. It’s 

going to hurt American jobs, American energy production. 

And so, I have a deep concern about this, and I think before the 

Administration and this Congress moves forward with the repeal of 

these types of provisions, we better really understand the facts on 

the ground. 

Now, I heard you earlier, in response to a question, saying that 

overall there would be no effect on energy production, or a very 

small effect. And by implication, on job production. I don’t think 

that’s right. I agree with what Mr. Tiberi said earlier, and I would 

urge you to speak to those who are in the business of doing this, 

to understand what the real impact is going to be. 

I sent a letter to Secretary Geithner last year, asking what would 

be the impact on American energy production jobs, and it’s not just 


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the producers, but it’s the welders and the mechanics and all the 

others, a lot of blue collar jobs, good paying blue collar jobs. And 

I have yet to get an answer. And your statement earlier is not really backed up with any substantiation with regard to what this impact would be on jobs. 

So, again, getting back to my original point, we need a realistic 

transition strategy. And I understand where they’re trying to go 

with biofuels. The third and fourth generation of biofuels is very 

exciting. But we can’t penalize current energy production without 

having all of this ready to go. You need the proper sequencing. 

So, I would urge you, please, to speak to the industry directly to 

understand what the impact is going to be on American energy-producing jobs, and energy production in this country. 

Mr. MUNDACA. Well, thank you, Congressman. We are more 

than willing to engage with anyone who has suggestions about the 

effects of these proposals. 

I believe when Dr. Alan Krueger, Chief Economist of Treasury, 

testified before the Senate last year, his analysis indicated again 

less than 1 percent effect, with respect to production on oil and gas 

from these proposals, I think less than one half—— 

Mr. BOUSTANY. And there have been rebuttals to his suppositions and proposals. 

Mr. MUNDACA. I understand, yes. 

Mr. BOUSTANY. And so, I think it’s incumbent upon the Administration and this congress to get the facts, and get the facts on the 

table. 

Mr. MUNDACA. We understand. 

Mr. BOUSTANY. Thank you. Mr. Chairman, I yield back. 

Chairman LEVIN. And thank you. Mr. Davis of Illinois, and then 

Mr. Etheridge. 

Mr. DAVIS of Illinois. Thank you very much, Mr. Chairman. And 

I want to thank the witnesses for their endurance. 

Job retention, job creation. No matter who I talk to, if they’re involved in public policy decisionmaking, are very much concerned 

about these issues and have them high on their priority list of 

problems that have to be met and resolved in our country. So there 

is a great deal of hope riding on energy conservation, green technology development, finding new sources of energy. And when people talk about where will new jobs come from, or where can we get 

jobs, this is one of the places that we seriously look. 

Two questions. One, why should Americans really be so optimistic that this new emphasis will actually create jobs and work 

opportunities for those who find themselves lacking and wanting? 

And two, many argue that labor supply in what we call disadvantaged areas, disadvantaged communities, are among minority populations, often don’t have the skills necessary to actualize the opportunities that may very well exist. And so, my question there becomes what is the Administration doing or proposing that will provide the training opportunities to make sure that these affected 

groups can, in fact, make use of this new opportunity that we are 

all hoping is going to be created? 

Mr. ROGERS. Let me take one shot at that, Representative 

Davis. The—we should be optimistic, because this is, at its core, 


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what the United States is best at doing. This is about innovation, 

entrepreneurship, and being ahead of the curve. 

And the opportunity that we have, particularly in the clean energy arena, is a set of technologies where the United States has a 

clear global leadership position, where we have not historically converted that into the kind of manufacturing leadership position that 

creates the kind of long-term, sustainable, good-paying jobs that 

this country was built on in the post-World War II period. And our 

challenge is to really recapture that leadership, recapture leadership in manufacturing. And this Committee has been essential for 

making that happen. 

To your point, if we can get the capital formation, particularly on 

manufacturing, we then have the challenge of making sure that we 

have a world class workforce that’s able to take advantage of these 

opportunities. And so, we’ve been working very closely with the Department of Labor. Secretary Chu actually was out last week, talking about $100 million that we were going to spend to train people 

to be able to implement the smart grid investments that we laid 

out, the smart grid investment grants, because it’s quite clear that 

what it takes to maintain a smart grid infrastructure is very different than what it took to maintain grid infrastructure that was 

built on technologies from the forties. And so, we are investing, in that case, $100 million in partnership with the Department of Labor in a set of specific communities, 

trying to build those capabilities. And we have got to do that in 

multiple other areas to make sure that we have the workers who 

can take advantage of these opportunities. 

Mr. DAVIS of Illinois. Is the collaboration also taking place with 

Treasury, in terms of the tax incentives that are part of the overall 

effort? 

Mr. MUNDACA. They are. What we try to do—and some of it is 

longer term, some of it is shorter term—is carry out the President’s 

focus on education and worker training. There are a number of tax 

provisions addressing that. The American Opportunity Tax Credit 

that was part of the Recovery Act, again, part of the longer term 

efforts to get American labor supply skills up to where they need 

to be. 

And again, as well as incentivizing hiring of persons in disadvantaged communities, and disadvantaged categories, a work opportunity tax credit as well. So again, the Administration is very focused on this issue of increasing the skills in labor supply, and providing incentives for hiring people from categories that perhaps are 

disadvantaged. 

Mr. DAVIS of Illinois. Thank you very much, Mr. Chairman. 

Thank you, gentlemen. 

Chairman LEVIN. Mr. Van Hollen, your turn. 

Mr. VAN HOLLEN. I thank you, Mr. Chairman, thank both of 

you gentlemen for your testimony. I am going to submit, in writing, 

a technical question regarding the scope of the residential renewable energy tax credit. I would appreciate if you could get back to 

me on that. 

Two questions, one related to biofuels. And as we move toward 

the next generation of biofuels, based on non-food feedstock, many 

of us believe that the federal incentives should be technology-neuVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00090 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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tral. So, for example, algae in other sort of next generation biofuels, 

would be on a level playing field with cellulosics. And I assume the 

Administration shares that position, that as we try and design 

these incentives, they should, in fact, be technology neutral, so we 

are not providing a bigger subsidy, arbitrarily, to one or the other, 

that it’s based on the science and the technology. Is that right? 

Mr. MUNDACA. That’s right. We look forward to working with 

you. These are difficult technical decisions to make about the level 

of subsidies that are in parity across different technologies. And 

again, we look forward to engaging on that to make sure we have 

done that right. 

Mr. VAN HOLLEN. The next issue relates to the amount of investment as a Nation that we need to be making in clean energy 

technology in order to meet our goals, our National security goals, 

our jobs goals, our climate change goals. 

And as much as we are doing now, it seems to me we need to 

take a quantum leap forward if we’re really talking about the kind 

of jump that we want to make in this technology, and to be able 

to compete with the Chinese and others that are making enormous 

national investments in this area. In this connection, I want to 

commend the Administration, the Department of Energy, for working to get out the door the section 1703 loan guarantees, and those 

who are originally part of the 2005 energy legislation. And more of 

those projects have been financed in the last year than in the previous 4 years. So I commend you on that, and also commend you 

on working with the new authority under section 1705 as part of 

the recovery bill. 

But my question is, just looking at those two programs and at 

least the amounts of money currently allocated to that, doesn’t it 

make sense to look at how we can create a mechanism that will 

allow a lot more, in terms of leveraging private investment? 

Clearly, I think we’ve done a good job when it comes to providing 

incentives for cutting edge technologies, but I am focused more on 

established technologies that have already been proven effective, 

where you have lots of people looking for capital on the sidelines. 

And as part of the energy bill that passed the House, we had a 

clean energy bank idea. There are different proposals floating 

around. 

But I just want to get your sense about whether or not, given our 

current level of programming, you believe we can leverage what I 

believe is probably hundreds of billions of dollars of private investment that will be needed if we’re going to reach the goals that we 

set out nationally, and that the President set out. What is your 

view of that path toward the future? 

Mr. ROGERS. With the Recovery Act, we were able to make a 

downpayment on the Nation’s energy and environmental future. 

And the 1705 program was critical to enabling us to begin to make 

loans. 

The capital formation challenge ahead of us is very large. Energy 

has historically been one of the sectors that has been slower to innovate, in part because of the scale challenges and the capital formation challenges. 

And so, as we look forward, we want to build on the successes 

of things like 1603 and 48C that this Committee has been so imVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00091 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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portant in leading, because that created a tax incentive structure 

for driving us forward. And we need to make sure that that links 

up with how the capital markets create capital behind that. 

And so, you know, as we have talked with the congress, we are 

looking for ways to make things like loan capabilities over a long 

period of time. Right now, we have a set of funding under the Recovery Act. We are going to run out of that. We’ve asked for more 

funds on nuclear, we’ve asked for more funds on renewable energy. 

And that’s going to sort of take us through another budget period. 

I think the opportunity and the challenge is, how do we get capital formation on a consistent and systematic basis across the next 

decade or two decades? And that, I think, is the opportunity both 

in the Tax Code and then, you know, as you described more broadly, the capital formation challenge is something we have to think 

about holistically. 

Mr. VAN HOLLEN. Right. Well, I am looking forward to an ongoing conversation on that, because I think that what we have 

done is a very good start, and we would not be as far along as we 

are without the efforts that have been undertaken to date. 

But I still think we’ve got to take a quantum leap forward, especially in finding ways to get a lot of the private capital, which I 

think is interested in moving into this area, but understand some 

of the risks. But given the fact this is a national priority, for security reasons and for jobs reasons, and for a whole range of other 

reasons, including the climate change issue, it seems to me we 

need to supercharge this effort, and we look forward to working 

with you on that. Thank you, Mr. Chairman. 

Chairman LEVIN. Thank you. Under our rules, Mr. Heller, you 

are next. And then it will be Mr. Etheridge, Mr. Higgins, Mr. Pomeroy, and Ms. Berkley. So, Mr. Heller? 

Mr. HELLER. Thank you, Mr. Chairman. I want to—— 

Chairman LEVIN. Unless you want to yield to—no, you don’t 

want to do that. 

Mr. HELLER. I feel sorry for him, I really do. Thank you, Mr. 

Chairman. And I want to thank the witnesses for being here today. 

And there is some light here at the end of the tunnel, so thanks 

for hanging in there for some of us here in the end. 

I want to shift our attention briefly here to geothermal energy. 

In the State of Nevada, of course, it’s a huge source of potential energy, and it’s a safe, clean, and effective source that can be used 

for large-scale commercial or even small-scale residential. So it’s 

very versatile. 

I had a meeting in my office 2 days ago with the National Association of Counties. Mostly the smaller counties, the more rural 

areas in Nevada, and this could be effective in six or seven other 

western states. But this is their concern. I am glad you’re here, because I told them I would bring this to your attention, and that is 

in last year’s interior appropriations bill it essentially repealed the 

provision in the 2005 Energy Policy Act that allowed for revenue 

sharing with local counties. And the royalties are about 25 percent. 

When you have a community of 20,000 to 25,000, or a local county 

of 20,000 to 25,000, $2 million to $3 million can be pretty—it’s a 

large amount of money. And they use that for all sorts of issues, 

whether it’s for education or health care or some of the other welVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00092 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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fare causes, but they also use it to develop these renewable resources. 

And so, there is some consternation right now that I am seeing 

with these counties because of the lack and the loss. And they are 

even more concerned, because the Administration, in this year’s 

proposed budget, continues to promote this policy of removing these 

royalties to these local governments. 

So, the question is this. And being here from the Treasury, Mr. 

Mundaca, to promote green jobs and renewable energy, would you 

agree that the goal of creating green jobs is negatively affected by 

this policy? 

Mr. MUNDACA. I would have to look at it more carefully. I am 

not familiar—I don’t know that there is a tax component to it, but 

I can certainly look into what the revenue sharing provision is that 

you are concerned about. 

Mr. HELLER. Okay. To clarify, though, it is 25 percent. So it 

goes to these small counties, and they use it, of course, to develop 

this energy. 

I have a bill out with Mr. Thompson, a bipartisan bill, that 

would reinstate these royalties. And I am certainly hoping to get 

the support from the Administration moving forward, so that we 

can help develop this. 

Mr. Rogers, you mentioned something about wanting to double in 

4 years. I think this really stunts the growth of geothermal energy 

if these smaller counties can’t share in the revenue produced with 

this energy. 

I want to touch on one other issue quickly, because I know my 

time is short. But that also has to do with transmission lines. 

Transmission lines are important, especially in large rural areas, 

in getting this energy from rural areas to the more urban areas. 

And we are making decisions with this Administration that runs 

contrary to the ability to put these transmission lines in place. 

As an example, we have just listed as potential on the endangered species list a sage grouse. And sage grouse is currently a bird 

that is being hunted regularly in Nevada, and yet it’s about to create massive—nearly insurmountable—hurdles to develop renewable energy in getting that power to the urban centers. 

So again, I guess the question is similar to the above in stating 

one goal of promoting renewable power, and then acting in a completely different direction and counterproductive fashion. 

So, I guess the question remains, what is the Administration’s 

plan, if there is one, to address transmission lines needs in the 

west, and wouldn’t you agree that this sort of management and 

conflicting policy goals is a problem? Mr. Rogers, I will leave that 

with you. 

Mr. ROGERS. So, Secretary Salazar, Secretary Chu, Chairman 

Wellinghoff have been actually working quite closely together on 

both the transmission siting issue and on the renewable siting 

question, because it involves all three of those different departments in making those decisions. One of the things that is actually 

working quite well is the collaboration across those departments, to 

make sure that we get some coherence across those programs. 

So, we have been accelerating, as I think you may have seen, the 

siting of renewables in—through the bill of land management. And 


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there has been a very important collaboration that has expedited 

the pacing of that to move much faster than it historically had. 

We are also doing the same thing around transmission. There is 

a very clear—in the west, the Western Governors Association has 

provided terrific leadership, in terms of creating an architecture for 

what the transmission system needs to look like in the west, and 

we are working very closely with them to make sure that that actually comes to pass. We started under the Recovery Act, actually 

through the Western Area Power Authority, making loans to one 

transmission line so far, and we have another set ready to go. 

Mr. HELLER. Thank you. Thank you, Mr. Chairman. My time 

is up. 

Chairman LEVIN. Mr. Etheridge. 

Mr. ETHERIDGE. Thank you, Mr. Chairman. Let me thank both 

of you for your perseverance. 

Mr. Davis talked about jobs, and let me carry that a bit further, 

because it’s more than about jobs, it’s really about jobs, the economy, and really, the long-term future. But I come from a state and 

from a district that has a lot of farmers, a lot of rural, small business people and communities that really rely heavily on energy. 

And the truth is, we have a designed policy in this country to have 

cheap energy. I mean that’s what has driven our economy for a 

long period of time. 

And so, an issue that will profoundly impact everybody back 

home is what happens to energy and how it goes up and down, and 

we know what’s happened. 

And it also has a significant impact on our economy. And it’s 

been estimated that renewable energy, or energy efficient industry, 

has created or supports about 10,000 jobs, just in North Carolina 

alone. And so, whether you call it green energy or whatever you 

call it, it’s win-win. 

So, my question—because I think it does two things, it helps the 

economy and it also frees us from the grip of foreign oil. And in 

just one example, I have one company that happens to be in my 

district that was in the 31st year in a little small rural county, and 

they produced a substantial amount of the enzymes for alternative 

fuels. And they employ about 500 people and the whole global 

biofuels market operation, the R&D and Department of Energy 

projects, and others. 

So, my question is this. These projects will be cornerstones, or 

projects like them for the next generation of domestic production 

in advanced biofuels, bio-based productions, specialty chemicals, et 

cetera. Can we expect the Administration to increase funding for 

programs such as bio-refinery assistance programs? Because I 

think that’s a critical part of it, to expand this to include production of bio-based materials, chemicals, and products. I think we 

have to get beyond just fuels, but get to chemicals and products related to it. 

Mr. ROGERS. We are clearly looking forward, Congressman 

Etheridge, to working with Congress to figure out what the scope 

of any provisions going forward are. Advanced biofuels are an important part of meeting our energy and environmental goals. Clearly, the enzymatic components to that are an area where U.S. innovation is putting us ahead. 


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And I think the opportunity, going forward, is to really structure 

both comprehensive energy and climate legislation and tax policies 

as part of that, to really make sure that we are advancing the state 

of the art quite quickly, and making sure U.S. leads both in innovation and in manufacturing of each of those pieces. 

Mr. ETHERIDGE. Because those chemicals are a critical part of 

that right now. 

Mr. Mundaca, you ran down a whole list of tax proposals that 

the Administration is looking at, as far as pulling back some of 

those brakes. And it looks like my time is out. But I would just say, 

what does the Administration have in place as a safety valve? Because as we start to move down this road, if we see huge spikes 

in energy costs, we’re going to have a huge pushback, and we’ve 

got real problems. 

Mr. MUNDACA. I will be brief. Yes, we do understand that. 

Again, our analysis of the ones we have proposed to pull are less 

than one half of 1 percent effect on production prices, et cetera. But 

obviously, we are open to further discussion of the effects of what 

we’ve proposed. 

Mr. ETHERIDGE. Thank you, Mr. Chairman. I look forward to 

that opportunity. 

Chairman LEVIN. Mr. Higgins, would you like to inquire? 

Mr. HIGGINS. Thank you, Mr. Chairman. The United States has 

5 percent of the world’s population and about 28 percent of the 

world’s economic growth. We’re leaders in virtually every area of 

innovation. But I think in the development of alternative energy 

sources, we have fallen behind. And I think the rest of the world 

is rising behind us. 

And I think the reason for that is that our tax incentives are 

highly fragmented. We have a lot of stops and starts. In order to 

send a price signal to the financial markets and to manufacturers 

to embrace this new technology, I think you have to have a very 

aggressive and sustained tax incentive program to get them to embrace this new technology. 

Give you an example. It’s a great American company called Applied Materials. Applied Materials makes the machinery that 

makes microchips that are in our computers. The Chief Executive 

Officer of Applied Materials about 6 years ago saw the volatility in 

the chip market. So he figured he had to add something new to the 

business line. Using nanotechnology, using silicon, Applied Materials decided to make the machinery that makes solar panels. A 

highly successful business. They have 14 factories throughout the 

world. Problem is, 95 percent of their business is outside of the 

United States. 

Last year, the industry brought in—or that company realized 

$1.2 billion in revenues. So why is it that there is this great American invention by an American innovator, but yet there doesn’t 

seem to be the market in our country, which should be leading in 

this regard, relative to the product, the machinery, that he is creating? 

As everybody has said here, you know, we use these tax incentives to signal to the markets. So they have to be stronger in both 

depth and duration to provide the private sector the kind of tax inVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00095 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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centives that are necessary to embrace this economy, and create 

real jobs with a real future. 

And I think, to underscore the importance of this, over the next 

40 years we will add 2.5 billion people to the global population, and 

they will all consume energy. This is an opportunity that Germany 

has taken advantage of. This is an opportunity that China has 

taken advantage of. And this is an opportunity that quite—it’s perplexing that the United States is not as effective in embracing this 

early on, and creating the kind of jobs in this economy. 

Mr. ROGERS. So, thanks to this Committee, we are increasing 

U.S. competitiveness globally in these key areas. 

I think, as you described, consistency in the tax message and a 

clear price on carbon and other pollutants are essential for making 

sure that we continue that competitiveness over a long period of 

time. 

Mr. MUNDACA. Yes, I will be brief. We have heard the same 

concerns, even from Applied Materials themselves. They have come 

in to see us about the uncertainty in the Tax Code, the fact that 

there are changes from year to year, provisions expire. The Administration is very cognizant of the effects of having these temporary 

provisions on long-term planning. 

We propose to make the R&D tax credit permanent. I think in 

the context of a comprehensive energy policy, we need to think 

about building in more permanent incentives, so that planning can 

continue, the businesses can know the incentives that are there 

today will be there in 5 years—most of them don’t plan year-toyear, they plan at least 5 years out. They need to know what it 

looks like 5 years out on the tax side. 

Mr. HIGGINS. Thank you. 

Chairman LEVIN. Mr. Pomeroy, would you like to inquire? 

Mr. POMEROY. Thank you. Thank you, Mr. Chairman. I represent North Dakota. We have coal, oil, wind, ethanol, biodiesel. 

We have it all, and I have got, therefore, 45 minutes of questions 

for you to get in in 5 minutes. 

Let’s start. Is basically increasing energy self-sufficiency a central tenant of the Administration’s energy policy? 

Mr. ROGERS. Yes. 

Mr. POMEROY. Perfect. In that regard, let’s talk about the 

biofuels, to begin with. The tax credit in support of biodiesel has 

expired. Does the Administration support restoration of this tax 

credit? 

Mr. MUNDACA. We propose to make the tax credit available 

through the end of 2011. 

Mr. POMEROY. That’s good enough for right now. The tax credit 

for ethanol is expiring at the end of this year. Does the Administration support steps to continue to some dimension—we will talk 

about how long—the continuation of the ethanol tax credit, or does 

it favor having it lapse at the end of this year? 

Mr. MUNDACA. Again, it’s part of the general extender package 

that the Administration included in the budget. I have heard here 

today there are a lot of different views about that. We have offered 

to engage on that, but the budget proposal, again, was to extend 

it through the end of 2011—— 


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Mr. POMEROY. Well, this was—to 2011. In this respect, the 

budget proposal is very well taken—maybe modest, but well taken. 

There are very strong feelings on both sides of the dais in favor of 

biofuels. We either have completely—the promise they propose, in 

terms of ramped up production, creation of discernable—you know, 

making a difference in our energy supply, increasing prosperity 

across rural America, putting people to work, generating throughout the entire distribution chain positive economic activity in excess of 100,000 jobs with ethanol alone, at the time we need it. 

The—in addition to that, I—so I strongly favor continuing a policy that supports ethanol and domestic ethanol. That would mean 

continuing tariffs, as well. If you are moving toward self-sufficiency—if self-sufficiency is a central tenant of our goal, we don’t 

want to move to imported ethanol, like we’ve been so dependent on 

imported oil. 

Now, on to fossil fuel production. Mr. Rogers, your background 

in this area, senior partner at McKinsey, the oil—American petroleum practice a substantial part of what you did with McKinsey, 

I think you can give us some technical information that would be 

helpful. This business of intangible drilling costs actually—I don’t 

know where the word ‘‘intangible’’ comes from, but this is—these 

are basically expenses of putting in the well and paying for people 

to do it, is that correct? 

Mr. ROGERS. So I’m not an expert, actually, on oil and gas tax 

policy. So I would actually defer to Mr. Mundaca on that. 

Mr. MUNDACA. That’s right, they are the costs with respect to 

the planning going into the drilling. And the tax issue, as I’m sure 

you know, is whether those need to be included in the cost of the 

asset produced, and therefore depreciated over time, or whether 

they are immediately expensable. 

Mr. POMEROY. My sense is that—and I don’t mean to—I see 

that my time has elapsed. It deserves extensive discussion. But 

even wages, under the Administration’s proposal, would be amortized. That makes no sense. I mean I don’t believe we take the 

package of tax proposals relative to oil, as recommended by the 

budget, advance them without having a substantial impact on our 

continued developing domestic production. 

The President now talks about offshore drilling. Well, offshore 

drilling? How about onshore drilling like places like North Dakota? 

These are heavily supported with the present tax structure. And I 

believe that the financing and the considerations of continuing this 

kind of development, especially with independent producers, will be 

impacted by the proposal. Thank you, Mr. Chairman, I yield back. 

Chairman LEVIN. Ms. Berkley, you have been so patient. You 

have the last. 

Ms. BERKLEY. Mr. Chairman, thank you very much for your patience, and thank you both. I represent Las Vegas, Nevada. We are 

a state with one major industry, and that isn’t doing very well 

right now. So I look at energy independence and the development 

of renewable energy as a lifeline for the State of Nevada for many 

reasons. 

One is I think developing renewable energies is important for our 

national security interests. I think it’s important for our environment. But I think it’s—it could be very important for our economy. 


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We can create a whole new economy based on green jobs and green 

technology. You know that our senior senator, the Majority Leader, 

is very engaged in these issues, and I support his efforts. 

I am a former utility company attorney. I worked for Southwest 

Gas Corporation in a prior life, so I am a big advocate for natural 

gas, and I am glad that we are moving in that direction. But I 

want to talk to you about harnessing sun and wind and geothermal, as my colleague from northern Nevada spoke of, and the 

need to develop the—or create the transmission lines. 

We, the State of Nevada, could become an exporter of green energy to the other western states, and we are very excited about 

that, as well. So I am glad that we are moving in that direction. 

We need to move there with all deliberate haste. 

But there are a couple of things I wanted to bring up that—what 

I would like to see, and discuss this with you very briefly. I would 

like to see a modification of the combined heat and power, CHP, 

investment tax credit to include waste recovery systems, also 

known as recycled energy. As you know, recycled energy creates 

emissions-free clean power and currently receives no tax benefits. 

I also would like to see a CHP tax credit increase from 10 percent to 30 percent for highly efficient systems. I have a letter that 

I would like to submit for the record that has—in support of this 

from 85 corporations, industry associations, and so forth. 

I would also like to see—— 

Chairman LEVIN. Without objection, it’s entered into the record. 

[The information follows:] 

Ms. BERKLEY. Thank you very much, Mr. Chairman. I would 

also like to see the creation of a 30 percent tax credit for energy 

efficient motors. I have witnessed them personally at McCarran 

Airport in Las Vegas, and at our Las Vegas Convention Center. We 

have energy efficient motors powering the escalators. It has saved 

these public entities a small fortune in energy costs. We need to 

develop that. And if we can incentivize it with a 30 percent tax 

credit, it will not only lower our energy costs, but it will create very 

important jobs that certainly the people in my district can use with 

13.9 percent unemployment in the State of Nevada. 

What do you think about those two proposals? 

Mr. ROGERS. Industrial combined heat and power facilities are 

very important for the competitiveness of U.S. manufacturing facilities. The opportunity in the United States for expanding that is 

very large, and it’s something that we actually had $100 million 

under the Recovery Act to fund. We were 10 times over-subscribed 

with great projects. This is an area that really is important for 

making U.S. manufacturing more competitive. 

Similarly, things like high efficiency electric motors are quite important for the ability of U.S. manufacturers to lower their energy 

costs. Very high return investments. And to your point, I think the 

key question is how do we make sure that those manufacturers 

have the—and building owners—have the capital in order to fund 

those kind of projects. 

Ms. BERKLEY. And the legislation that we will be considering, 

do you think that we will be able to put—do you think it’s worthy 

of our consideration to put the tax credits in for energy efficient 

motors in our CHP? 


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Mr. MUNDACA. I have a copy, I think, of the letter you referenced with the list of the companies supporting and with the legislation, I think, from Representative Tonko and Representative 

Inslee as well, and we will certainly take a close look at that. 

Ms. BERKLEY. I appreciate it. And one other comment in closing. For those of my colleagues who are so gung ho on nuclear 

power, if they can figure out what we can do with the nuclear 

waste, other than putting it in the State of Nevada, I would be 

more than glad to consider expanding nuclear power. But until we 

figure out what we’re going to do with the waste, it’s a no-go as 

far as the people that I represent are concerned. 

Chairman LEVIN. And with that further example of the tenacity 

of our colleague from Nevada, to put it mildly—tenacity we admire—we want to thank you for your tenacity. From Treasury, you 

have been so helpful, and from the Department of Energy, we want 

to thank you for being here for so long. 

I think this has been an eventful hearing, and has laid the 

groundwork and our panels will follow for some further legislation 

building on what has been undertaken in recent times. 

So, thank you. I think what we will do is to adjourn—recess for 

7 minutes, sending word out to everybody, our colleagues, that we 

will start with the second panel at 1:15. 

And thanks again to both of you. 

[Recess.] 

Chairman LEVIN. The Committee will come to order. Thank you. 

It took an extra 5 minutes to have a cookie for lunch. Just wait 

a minute so our colleagues can gather. 

All right. We have had a really interesting morning. We planned 

this so that our distinguished second panel did not have to be here 

for the entire morning. 

I am not sure if you had reports on the testimony, but it was 

very germane, I think. We had some effective back and forth between our colleagues and the two representatives of Treasury and 

Energy. 

Let’s begin. Under our procedures, we will follow the same order, 

I guess, as we did this morning in terms of those who inquire. 

I have been told that the Minority agrees we will try to limit our 

inquiries to 4 minutes instead of the five. Is that okay? We will try. 

I will try to enforce it. 

Here we go. Thanking all of you on this very distinguished panel. 

I will introduce each of you, kind of go down the row. Then if you 

will just take over one after the other and submit your testimony. 

It will be in the record, but follow whatever procedure you would 

like in terms of referring to it. 

First, no stranger to this place, we welcome you, Mr. Pickens, T. 

Boone Pickens, who is Chairman of BP Capital of Dallas, Texas. 

Victor Abate, Vice President of Renewables with General Electric. We had the pleasure of visiting with the Chief Executive Officer of General Electric yesterday. He could not be here, but we are 

pleased, Mr. Abate, that you could be here. 

Next, Dr. Jeffrey Sachs, who is known to many of us, who is the 

Director of The Earth Institute at Columbia University. 

Next, Dr. Joseph Romm, who is a Senior Fellow at the Center 

for American Progress. 


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Finally, we also look forward very much to your testimony, the 

Honorable Karen Harbert, who is President and Chief Executive 

Officer of the Institute for 21st Century Energy at the U.S. Chamber of Commerce. 

Welcome, all of you. More of our colleagues will be coming in 

shortly. 

Mr. Pickens, welcome. We look forward to your testimony. 

STATEMENT OF T. BOONE PICKENS, CHAIRMAN, BP CAPITAL 

Mr. PICKENS. Thank you. Chairman Levin, and I have to mention my friend, Chairman Rangel, there on your right, because we 

have worked on this in the past, as you well know. 

Chairman LEVIN. We did. 

Mr. PICKENS. Chairman Levin and Members of the Committee, 

thank you for the opportunity to testify here today. 

Let me begin by telling you something my father once told me. 

He said son, a fool with a plan can be a genius with no plan. He 

and my mother were worried at that point that they were raising 

a fool that had no plan. 

America has not had an energy plan for 40 years. Every President since Richard Nixon has pledged to reduce our dependence on 

foreign oil. President Obama had pledged to eliminate our dependence on OPEC oil in 10 years. We can do that. It is not easy, but 

we can do it. If we do, President Obama will be the only one, the 

only President, to have made good on that promise. 

We are witnessing the greatest transfer of wealth in human history, sending more than $1 billion a day to foreign countries for oil. 

Not only that, but because this Committee has jurisdiction over 

trade, I know you will be interested in this. 

In January 2010, our trade deficit for the month was $37 billion; 

$27 billion of that money was spent overseas to import oil. That 

means foreign oil is responsible for approximately three-quarters of 

our trade deficit. 

When do we stop investing in OPEC and start investing in America? 

With the plan I have outlined and spent a good bit of time, 

money and energy in promoting, we will enhance the economy, improve the environment and resolve the national security threat inherent on our dependence on foreign oil, much of it from OPEC and 

many nations who do not have our best interests at heart. 

The Pickens Plan has 1.6 million members. They are the new energy army and they are with me here today watching this hearing 

on the Internet. 

We have to go American for power generation. That means renewables like wind and solar, nuclear, natural gas and clean coal. 

I am for anything that is American. Two-thirds of our foreign oil 

is used as transportation fuel. Building more nuclear plants or 

more solar wind farms will not make a dent in dependence on foreign oil. However, they will help, not on foreign oil though. 

The only way we can solve the OPEC oil threat is by replacing 

their expensive dirty fuel with cleaner, cheaper American natural 

gas. Natural gas or anything else that is American. Ethanol. Anything American, I am for. 


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Study after study shows we are awash in natural gas. We have 

well over a 200 year supply by current estimates. We are going to 

look like fools if we do not use natural gas for transportation. 

You have the legislation, the Natural Gas Act, H.R. 1835. It will 

provide tax credits to fleet owners to offset the cost of going to natural gas trucks as they retire existing vehicles. 

The best group outside of the Marines—if we start out to give a 

mission to some group in America, the best group you could give 

it to would be the Marines. The Marines are not available for this 

mission, but this mission could be carried out by America’s truckers. I think America’s truckers look like Marines. Give them a job 

and they will do it. 

If you Members of Congress point the way, we will start to solve 

our foreign oil problem. 

Let’s dismiss two concerns I hear over and over. First, Government does not have a role in this. Let the free markets work, they 

say. If you think OPEC is a free market, you are a sap. 

China is using state owned banks to finance state owned oil companies to lock up decades of oil production all over the world, including Iraq. 

This really does annoy me, that we went to Iraq 8 years ago, we 

spent $1.5 trillion. We got 31,000 of our people injured and 5,000 

were killed. We left Iraq with nothing that I can see. 

Who got the oil? China. China did not put a dime into that. They 

did not lose one person. They are going to develop two oil fields in 

Iraq. One is the largest oil field in Iraq, which is Rumaila. It is 15 

billion barrels. The largest oil field we have ever had in America 

is Prudhoe Bay, 14 billion barrels. 

They are going to be given a field that is as large as the largest 

oil field America ever had, and we leave there with nothing. 

Second, the skeptics say there is no natural gas fueling infrastructure. Forget it. Let’s look at our free enterprise system. If you 

create the market, the private sector will build it. 

Can you imagine what would have happened if we had told 

Henry Ford forget about building a Model T, there are no filling 

stations. 

It is easy. That part is the easy part. The resource is the hard 

part and we have the resource. 

This is about jobs. There is a lot of talk about the economy. We 

estimate the Natural Gas Act will put 236,000 clean natural gas 

trucks on the American roads. You will displace 5 percent of the 

foreign diesel demand each year and create more than 600,000 new 

permanent jobs, roughly the same number of temporary jobs created for the 2010 Census. 

Each Class 8 truck, identified Class 8, that is a heavy duty 18 

wheeler, Class 8, the heaviest of heavy duty, converted to natural 

gas creates six jobs. Each truck creates six jobs. 

This is just the start of it. The worse thing you can do, and I 

know this came up in a meeting I was in today, but do not tax the 

industry at this point. It is not time to tax the domestic oil industry. 

If you want to tax something, tax either foreign oil or tax gasoline, but do not take away from this industry and this country at 


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a critical time when we are trying to get off OPEC oil and get on 

our own resources. 

I urge your action and I want to close with this. The best time 

to plant a tree was 20 years ago, no question. I have said that and 

you have, too. I should have planted a tree 20 years ago. 

Just in case you did not plant it, and we do not have an energy 

plan in America and have not had for 40 years, so if you did not 

plant the tree 20 years ago, the second best chance to do it is 

today. 

We have got to have an energy plan for this country. We cannot—I am running out of time. I will be 82 years old next month. 

I have to get the energy plan fixed for America because we cannot 

leave this to generations in the future. 

My grandchildren and great grandchildren, and I have 13 of 

them, I cannot go out of here without having an energy plan, and 

we have the resources. We have the resources. All we have to do 

is a plan and you have to introduce it to America, and I promise 

you, we can carry it out. 

Thank you. 

[The prepared statement of Mr. Pickens follows:] 


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Prepared Statement of T. Boone Pickens, Chairman, BP Capital 


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f 

Chairman LEVIN. Thank you very much. 

Mr. Abate. 

STATEMENT OF VICTOR ABATE, VICE PRESIDENT OF 

RENEWABLES, GENERAL ELECTRIC 

Mr. ABATE. Mr. Chairman and Members of the Committee, I am 

Vic Abate, the Vice President of Renewables at GE Energy, and 

thank you for the opportunity to testify before you today. 

On behalf of GE, I would like to commend the Committee for its 

productive, pro-active positive steps over the past 5 years, and especially those taken at the height of the recent financial crisis. 

The Energy Improvement and Extension Act of 2008 and the 

American Recovery and Reinvestment Act of 2009 made crucial tax 


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policy changes that avoided a forecast 50-percent decline in wind 

installations and related jobs and resulted in a surprising record 

year of more than 10,000 megawatts of new capacity added to the 

U.S. grid in 2009. 

GE has been a significant contributor to this growth, since nearly 

one out of every two wind turbines installed in the U.S. is a GE 

wind turbine. Our $6 billion wind business supports over 7,000 direct and supplier jobs in 30 states. This is more than a twofold increase from 2005 and has been driven by supportive renewable energy tax policies. 

For example, two of our key suppliers, TPI Composites, a blade 

supplier in Iowa, and DMI, a tower supplier in North Dakota, are 

utilizing the advanced manufacturing tax credit program created in 

the Recovery Act to increase their capabilities to meet our growing 

demand. 

Sustained tax support for wind has also helped increase U.S. domestic content from about 20 percent in 2005 to 50 percent for 

projects that were created in 2009. This was done while quadrupling production. This equates to an eight-fold increase in U.S. 

made wind components since 2005. 

The Energy Improvement and Extension Act and the Recovery 

Act include significant tax incentives for combined heat and power, 

energy efficient components, manufacturing and smart grid deployment. 

Another example of how these tax credits have worked can be 

seen at one of GE’s appliances facilities. GE’s Bloomington, Indiana 

refrigerator plant was slated to close in January of this year, potentially eliminating 547 full time jobs. Instead, the plant remains 

open today to produce high efficient refrigerators. 

Over the past 5 years, tax credits have been very effective by 

adapting to a changing environment. 

The environment going forward for green energy deployment will 

be especially challenging. The demand for wind generation to meet 

standards at the state level is down. Electricity demand is down. 

Natural gas prices are down. As a result, our wind customers are 

finding it extremely difficult to sign purchase power agreements 

with utilities at levels that can support project economics. 

The challenges facing developers have flowed down to the turbine 

manufacturers who have seen new turbine orders decline significantly from the pre-crisis levels. 

In this environment, the convertible tax credit is critical to stabilizing wind production for the next few years. 

The section 1603 program of the Recovery Act is available 

through 2012 for wind installations, so long as construction begins 

no later than this year. Treasury guidance requires a detailed 

tracking system to satisfy the 5 percent safe harbor provision. 

For a manufacturer that is mass producing 3,000 units a year, 

this represents a tremendous tracking challenge. 

Without a legislative solution, we can see a 50 percent drop in 

wind installations in 2011 and 2012. 

In the spirit of continued green energy tax policy innovation, I 

have included in my written testimony policy changes that the 

Committee may wish to consider, and that can have an immediate 


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impact on green energy growth, U.S. manufacturing, and job creation. 

Some of these are simply the safe harbor requirement in section 

1603, making available an additional $5 billion in advance manufacturing tax credits, extending the manufacturing tax credit for 

energy efficient appliances, and creating a 30 percent ITC for highly efficient combined heat and power projects. 

The ability of the U.S. to keep up in the global race for leadership in green energy investment, manufacturing and job creation is 

tied to our ability to be innovative with our tax and other energy 

policies. 

We appreciate the opportunity to share some of our ideas with 

the Committee, and thank you for your time. 

[The prepared statement of Mr. Abate follows:] 


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Prepared Statement of Victor Abate, 

Vice President of Renewables GE Electric 


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f 

Chairman LEVIN. Thank you. 

Dr. Sachs. 

STATEMENT OF JEFFREY SACHS, PH.D., DIRECTOR, THE 

EARTH INSTITUTE, COLUMBIA UNIVERSITY 

Mr. SACHS. Mr. Chairman and Members of the Committee, 

thank you for the opportunity to be here with you. This is an unusually complicated topic because we do not have one objective 

here, we have at least three fundamental American objectives here. 

The first is energy security. Second is U.S. technological leadership, and the third is a low carbon economy. 

If we do not aim for all three of these, we are not achieving any 

kind of real solution for this country, and many of the solutions 


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that you hear and that are proposed are solutions for one or solutions for the other of these, but they do not reach the full range 

of the three core solutions that we are going to need. 

Let me also say while job creation is obviously part of this, the 

way to understand job creation in this is that a sound energy policy 

will make a sound economy. The direct jobs at stake are very small 

relative to the size of the economy, but energy is fundamental for 

the health of the economy and fundamental for our competitiveness. 

If we do not have plentiful energy, if we do not have secure energy, if we do not have environmentally safe energy, we will have 

devastation for tens of millions of jobs. 

This is not in my opinion principally about creating jobs for the 

individuals who sell wind turbines, with all respect. I love GE but 

that is not where the big issue of employment comes from. The big 

issue is whether we have a sound energy policy in this country that 

allows for our economy to grow and to create plentiful jobs. 

Fortunately, the United States has many alternatives right now, 

and arithmetic is extremely important here because the alternatives must be large scale to be meaningful. There are a hundred 

ways to produce energy, but there are only a few ways that count 

for an economy that is the size of the U.S. economy and in the context of the world economy. 

Those include large scale deployment of solar and wind power, 

the revival of the nuclear industry, the safe deployment of large 

scale natural gas deposits that have been found, and major technological changes, for example, the transition to electric vehicles and 

the flexibility that would allow to our energy system. 

These technology options are extremely exciting. They each involve 10 to 20 year national efforts. They are not something that 

can be accomplished from 1 year to the next. This, I think, is extremely important to note. 

I will not describe these individual options although one can 

mention and probably I should mention very quickly, in scalability, 

solar, wind, nuclear carbon capture and sequestration, something 

we have talked about for a decade but have not really done almost 

anything on, conversion to electric vehicles, and energy efficiency 

in a variety of ways, smart building, smart grids, smart machinery. 

I do not believe, by the way, that biofuels passes this test. Certainly not the first generation biofuels which are ecologically and 

from a food supply relatively a disaster. They just do not pass muster when one looks either at any aspect of it, carbon, ecology, food 

price impacts and all the rest. 

These large scale technological transformations are not easy to 

achieve because they are a mix of market incentives and many 

other things. They are the development of pre-commercial technologies, complementarities of public infrastructure and private investment. 

We have a very unclear regulatory framework on nuclear, very 

unclear on carbon capture, very unclear on large scale grid issues. 

We have very unclear public acceptance and we completely lack a 

road map. 

I want to agree with what Mr. Pickens said. We have absolutely 

no plan right now. I listened to the Administration. There are 100 


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good ideas, but there is no plan. This, I think, is the most damaging part for our country, that we do not have a framework that 

comes close to getting this right. 

What is a plan? In my view, it is a clear national commitment 

with targets and time tables, public funding of R&D for pre-commercial technologies guided by a long term strategy, public funding 

for pre-commercial demonstration projects, such as electrical vehicle deployment. 

In targeted cities, carbon capture and storage, long distance 

transmission grids. Long term tax and other market incentives for 

targeted energy systems. 

I would strongly urge that this Committee urge, even insist, that 

the President and the Administration set forth for the first time an 

overall strategy designed to meet the three goals of energy security, 

technological leadership and transition to a low carbon economy. 

Within that, it would be possible to identify strategies in each of 

these respective areas. 

I think at this point, Mr. Chairman and Members of the Committee, we just do not know the net effect of our policies right now. 

We do not have in almost any major area of technology a clear road 

map, and we are paralyzed. 

We have been paralyzed in many of these areas for more than 

a decade, and we will not get out of the paralysis until we have 

a plan, and that, I think, within that framework, then the tax policy will find a natural role because it is extremely important at a 

number of places. 

We are nibbling around the edges right now without a real national strategy and we are not making the large scale technological 

transformation that we need to do the arithmetic right for our 

country. 

With all respect, if you look at the arithmetic, how much energy 

we use, what it means for China to be doubling every 8 to 10 years 

in size, today’s article about China becoming a major coal importer, 

what all of this really adds up to for our security in the next 20 

years, we have not gotten started yet frankly on organizing a proper scaled, significant 10 year effort of an integrated strategy. 

Thank you very much. 

[The prepared statement of Mr. Sachs follows:] 


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Prepared Statement of Jeffrey Sachs, Ph.D., 

Director, The Earth Institute, Columbia University 


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f 

Chairman LEVIN. Thank you very much. 

Dr. Romm. 

STATEMENT OF JOSEPH ROMM, PH.D., SENIOR FELLOW, 

CENTER FOR AMERICAN PROGRESS 

Mr. ROMM. Chairman Levin, Members of the Committee, thank 

you for inviting me to testify. 

I worked in the House as a Science Fellow and I served as Assistant Energy Secretary. My message here and in my book 

‘‘Straight Up,’’ is simple, our energy policy is a Ponzi scheme. 

Michigan and the country face ruin if we do not change it. 

Let’s start with oil. Why do the majority of veterans of the Iraq 

and Afghanistan war support clean energy and climate legislation? 

Because they know we cannot keep sending $1 billion a day overseas to buy oil. 

In October, Deutsche Bank forecast $175 a barrel of oil price in 

2016. The International Energy Agency’s chief economist said in 

August bluntly, ‘‘We have to leave oil before oil leaves us.’’ 

More domestic production will not solve the problem. President 

Bush said in 2006 ‘‘America is addicted to oil. You do not break 

your addiction to alcohol by switching from imported beer to domestic.’’ 

Same for our oil addiction. Last year, the Energy Information 

Administration analyzed opening the entire outer continental shelf 

to drilling. The result? In 2030, U.S. gasoline prices dropped a 


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mere three cents a gallon. Three cents a gallon, from opening the 

entire outer continental shelf to drilling. Not the solution. In 2005, President Bush said ‘‘I will tell you, with $55 oil, we do 

not need incentives to the oil and gas companies to explore.’’ That 

was $55 a barrel. Today, we are at $80 a barrel and rising. 

We just do not need those oil incentives, yet last month the Senate passed a tax incentive bill that includes subsidies for completion of oil wells, low sulfur diesel, refined coal facilities, and fuel 

from coke. Why? Why are we doing this? 

Every year, fossil fuel consumption kills over 20,000 Americans 

from air pollution alone and causes half a million asthma attacks, 

according to the American Lung Association. 

A 2008 study found prenatal exposure to coal burning emissions 

was associated with significantly lower average developmental 

scores and reduced motor development for 2 year old children. 

Three year old children like my daughter, they do not vote. It is 

up to us to stop subsidizing harmful fossil fuel pollution. 

The worse idea yet is subsidizing coal to liquids. I sat through 

many liquid coal briefings for the Defense Science Board Taskforce. 

No independent group has yet found a net societal benefit for making liquid fuel from coal. Any significant production of liquid fuel 

would use up increasingly scarce water resources. Worse, it would 

all but guarantee the worse case projections for climate change. 

When my brother lost his Mississippi home in Hurricane 

Katrina, I started talking to the Nation’s top climate scientists. 

What they told me then is what the scientific literature says now— 

keeping our current energy policy risks a staggering nine degree 

Fahrenheit warming and five or more feet of sea level rise by century’s end. 

If we did not have any greenhouse gases, the planet would be 60 

degrees Fahrenheit cooler. Carbon pollution traps heat. That is 

why they call it a ‘‘greenhouse gas.’’ Think of it like a blanket. 

Some people claim that if you keep putting more blankets on, you 

will not keep warming. They just want us to stay addicted to fossil 

fuels. 

Carbon pollution is also poisoning the oceans, threatening all 

marine life. As a recent documentary on ocean acidification put it, 

imagine a world without fish. 

Senator Lindsey Graham said in January ‘‘The odd thing is you 

will never have energy independence until you clean up the air, 

and you will never clean up the air until you price carbon.’’ He also 

said ‘‘Every day we delay trying to find a price for carbon is a day 

that China uses to dominate the green economy.’’ 

Our competitors understand the fossil fuel Ponzi scheme. They 

understand that in the future, we are not talking about a few million clean energy jobs, all jobs are going to be clean energy, or else 

we are just not going to have a livable climate, and that is why 

their governments outspend us. 

They are trying to corner the market in the technologies that we 

invented. We invented the modern solar cell. They are dominating 

the market. 

We cannot make an economy just inventing stuff and letting 

other people deploy and manufacture it. That is not the road to 

high wage jobs for millions of Americans. 


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Until we have a carbon price, we need tax incentives for clean 

energy. The good news is those tax incentives work. 

The multi-year tax incentives for clean energy that the Committee supported in 2008 and 2009 helped save the U.S. renewable 

energy industry during the harsh recession. 

They helped increase the share of domestically manufactured 

wind turbine components in U.S. wind farms from under 30 percent in 2005 to over 50 percent today, an amazing turnaround. 

We need to add or extend several incentives, including the section 48(C) clean energy manufacturing tax credits, the cash grant 

in lieu of investment tax credit, and incentives for energy recycling. 

Finally, let me just end by saying the Center for American 

Progress’ Action Fund just released two reports, one on energy 

taxes and one on natural gas for heavy vehicles that I would like 

to request you place in the record. 

Thank you. 

[The prepared statement of Mr. Romm follows:] 


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Prepared Statement of Joseph Romm, Ph.D., 

Senior Fellow Center for American Progress 


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f 

Chairman LEVIN. Without objection. You are next. 

[The information follows:] 

STATEMENT OF KAREN HARBERT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, INSTITUTE FOR 21ST CENTURY ENERGY, 

U.S. CHAMBER OF COMMERCE 

Ms. HARBERT. Thank you. Thank you, Chairman Levin, Ranking Member Camp, and Members of the Committee. 

I am Karen Harbert, President and Chief Executive Officer of the 

Institute for 21st Century Energy at the U.S. Chamber of Commerce. 

I am delighted to let you know that in 2008, the Institute actually submitted a comprehensive plan to secure America’s energy fuVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00153 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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ture, to improve its environmental stewardship and grow our economy, and we would be delighted to continue to work with this Congress to actually implement those concrete 90 recommendations to 

put us on a more concrete path for our energy future. 

Let me commend you on the timing of this hearing because just 

last week, Doug Elmendorf, the Director of the Congressional 

Budget Office, highlighted a report that forecast an increase in 

public debt from $7.5 trillion at the end of 2009 to $20.3 trillion 

at the end of 2020, if President Obama’s fiscal year 2011 budget 

is enacted. 

As we are examining energy policy, it is more important than 

ever that we look to options that do not further burden the taxpayer and provide the affordable energy that we need to restore the 

8.2 million jobs we have lost in the current recession and create the 

more than 12 million jobs our Nation will need over the next decade. 

Recognizing the U.S. energy demand will increase by probably 20 

percent between now and 2030, we need a realistic plan that transitions us to a low carbon future while keeping our Nation strong 

and competitive. 

It will take time. It will take investment. It will take technology, 

some of which we do not even have yet. 

Investment on the order of 1.5 to $2 trillion is needed in the electricity sector alone to keep it reliable for our economy, and for our 

transportation sector, we are still 94 percent dependent on oil, and 

to date, we do not have a substitute for oil. Today, less than 1 percent of U.S. passenger vehicles are plug in hybrid electric vehicles. 

What are we going to do? First, we have immediate low cost benefits which can be realized by focusing on energy efficiency, particularly in the building sector and in the appliance sector. 

We released a report yesterday about how Federal policy can encourage that, and rather than going through that report today, I 

will just ask that it be included for the record. 

Chairman LEVIN. Without objection. 

[The information follows:] 

Ms. HARBERT. Let me talk a little bit about renewables, such 

as wind, solar, biomass and waste energy, and they are going to 

be playing an increasingly important role in our energy supply, yet 

today, wind and solar comprises less than 2 percent of our electricity. 

We have to be realistic about the achievable expansion of this 

important and valuable natural resource. 

Even under the Energy Information Agency’s modeling of the 

Waxman-Markey bill and its significant carbon constraints, by 

2030, it forecasts that wind and solar will only comprise 6 percent 

of our country’s portfolio. 

The history of fiscal incentives for clean energy in our country is 

basically checkered with a boom and bust type philosophy. We instead would propose that we extend the production tax credits for 

renewable energy for 8 years followed by a 4 year phase out, which 

would provide for longer term certainty for investors, but also provide a definite sunset, which would ensure that tax dollars do not 

continue to support technologies that are not commercially viable. 


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If you look at the U.S., when subsidies across the U.S. sector are 

compared, renewable resources continue to receive the largest percentage of Federal dollars, and the subsidies for wind and solar per 

unit of production are 80 times greater than that of natural gas 

and 25 times larger than that of nuclear. 

Let’s examine some other mechanisms which actually facilitate 

investment without further burdening the taxpayer. 

Regulatory streamlining. Nearly every single energy project in 

our country is facing burdensome siting problems. We are suffering 

from a plague in our economy which is called the ‘‘banana syndrome.’’ Build absolutely nothing anywhere near anything. 

The Chamber has begun to catalog these projects, all the energy 

projects proposed over the last 3 years. We have recorded 380 

projects, representing 250,000 jobs, and $560 billion worth of capital investments that is on the side lines because of abuse of the 

permitting process. No type of project is immune. Over 40 percent 

of these projects are in the renewable area. 

Congress can eliminate many of these obstacles by streamlining 

the approval process and giving investors the needed certainty. 

One clear example where Congress can be very helpful is in 

interstate transmission. Getting approval to site and bid a transmission line can take upward of 10 years. We need to fix that by 

giving FERC the authority it needs. 

Securing our energy future is in large part tied to the degree we 

are able to accelerate the deployment of capital. The Department 

of Energy’s loan guarantee program is a good start, but we would 

like to see the endorsement for a clean energy bank like that discussed in the Senate. 

It would be authorized to provide loan guarantees and other financial products and ensure projects which the conventional markets today try to avoid. A Federal approach that focuses on addressing market inefficiencies rather than competing with existing 

investors is an appropriate role for Government. 

There are two other areas I would like to briefly highlight. One 

is nuclear. It is very important to recognize the tremendous benefits that nuclear provides for our economy, not only is it 70 percent 

of our emissions free electricity, but it is an economic engine with 

each plant contributing more than $430 million to its local economy, employing 700 workers at wage rates about 36 above the local 

average. 

We estimate that if the 26 plants that are currently pending before the Nuclear Regulatory Commission are built, 240,000 jobs 

would be created. 

In the oil and gas phase, the oil and gas industry today employs 

about 9.2 million in the United States, and it would employ thousands more and it would contribute more in revenue if it was allowed to do so. 

We want to reduce America’s dependence on foreign oil and yet 

the proposals from the Administration will do the exact opposite, 

constrain domestic production and increase imports. 

First, they are proposing huge new taxes, $80 billion of new 

taxes on the oil and gas industry. We tried this back in the 1980s, 

and what happened? In 1986, imports jumped 19 percent. 


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The Joint Committee on Taxation’s report to this Committee for 

today’s hearing notes the potential for that to happen if these taxes 

are levied on the industry today. That is a dangerous signal for our 

economy. 

Second, the proposal to actually expand production actually does 

not expand production. It only commits to studying future production and actually takes leases off the table. 

In conclusion, to lay the ground work for our Nation’s energy security, our environmental protection and our economic prosperity, 

we need to pursue policies that put more energy options on the 

table for America, do not pick winners and losers, and certainly do 

not add to our exploding Nation’s debt. 

Thank you. 

[The prepared statement of Ms. Harbert follows:] 

Prepared Statement of The Honorable Karen Harbert, 

President and Chief Executive Officer, Institute 

for 21st Century Energy, U.S. Chamber of Commerce 


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f 

Chairman LEVIN. Thank you. We are each going to take 4 minutes. Let me throw out a question that I hope might flush out what 

I think may be differences underlying different approaches. 

If you do not mind, Ms. Harbert, I am going to take a sentence 

or two out of your testimony and go down the line and ask each 

of you to comment on it. 

This is the quote. ‘‘Investing in research and development, especially deployment of new technologies, will ultimately pay major 

dividends, but it is important to remember that government should 

not be in the business of picking technology winners and losers, 

and that research and development, while critically important, 

takes time. 

The role of the private sector in our future energy security is 

paramount, and we should not seek to crowd out their participation, capital, innovations or expertise.’’ 

We heard earlier from some of our colleagues warning against 

picking winners and losers. If I might ask, starting with you, Mr. 

Pickens, just comment briefly. I think there are differing underlying assumptions here that need to be discussed. 

Mr. Pickens, your comment, and then you will have the last 

word, Ms. Harbert, if my 4 minutes are not up. 

Mr. Pickens, your comment on what I just read. 

Mr. PICKENS. It is not picking winners or losers because you 

only have one resource. It is already picked. There is only one resource we have in America that can move in an 18 wheeler other 

than diesel, which is imported. It is natural gas. You cannot move 

it with a battery. 


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I had this conversation with Senator McCain in August of 2008. 

He said we cannot be put in a position to pick winners. I said it 

is not a multiple choice question, Senator. There is only one resource. You need to understand it, embrace it, explain it to the 

American people and move forward and get an oar in the water. 

We have to get something going. We cannot continue to talk 

about this subject forever. Now we are down to a point where we 

only have one resource. It is abundant. Fortunately, it is abundant. 

You have four thousand trillion recoverable gas. J.P. Morgan 

says eight thousand trillion in place. You cannot recover all that. 

They know that. Four thousand trillion would give you the barrels 

of oil equivalent of three times what the Saudi’s claim they have, 

which I do not think they have what they claim they have. 

You will be three times in equivalent barrels of oil. You will have 

it in a cleaner, cheaper domestic fuel than the oil you are importing. 

Chairman LEVIN. Mr. Abate. In your testimony, you seem to be 

picking winners and losers. What is your comment? 

Mr. ABATE. The comments were more about where the market 

is today. When you look at the energy system and our energy resources long term, it is about diversification. The way we see it 

right now is with alternative energy being less than 2 percent, the 

question is is it going to be everything? No. It clearly can be more, 

5–10–15 percent, and that is a journey that we can go down. 

When you look at alternative energy, there is a portfolio of ideas in there. As a technology company, we have invested $1 billion in 

wind. The cost of wind power has come down 80 percent in the last 

25 years. It is now the most commercially scalable alternative resource globally. 

That happened with research that was d1 years ago and then 

market support and the ability to deploy. 

When you look at the alternative energy space, I do not see a 

problem that we cannot solve. The question is we just have to 

make it very clear as to the journey we are on that this is a space 

we want to continue to penetrate with, and you will see companies 

step up to the plate and continue to invest and build out. 

You will see solar get more competitive. You will see other technologies become more competitive, as long as there is a long commitment that this is a journey from a diversification and security 

perspective that the country wants to be on. 

Chairman LEVIN. Briefly, Dr. Sachs. 

Mr. SACHS. Yes. Of course, we target technologies and have for 

decades. We would not have the Internet. We would not have a 

computer industry. We would not have a biomedical industry if we 

had not engaged heavily in federally supported targeting of technologies. 

Here, we have many areas where we know we need to go. With 

electric vehicles, we know, for example, the battery technology is 

so important, but there are many other parts of the electric vehicle 

transition that needs Federal support. 

Solar, wind, nuclear, the new grid, carbon captures, sequestration, are all very important large scale areas where we will have 

private and public research and development efforts that need to 

be complimentary to get the job done. 


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It is complimentarities. That is how large scale technological 

change happens throughout our economy, and it is how it has happened for decades. 

Of course, we aim at many opportunities. Which one ends up 

being the big winners, you are never quite sure. It is not to go one 

way. If we only drove 18 wheelers, maybe there would be one answer, natural gas, but we drive lots of things. We use energy for 

lots of things as well. We need to go down many different pathways. 

Chairman LEVIN. My 4 minutes are up. I will leave it to others. 

Mr. CAMP says I can take more than 4 minutes. 

[Laughter.] 

Chairman LEVIN. Mr. Romm, be brief, if you would. 

Mr. ROMM. I have heard the phrase ‘‘we cannot pick winners 

and losers’’ from back when I was at the Department of Energy in 

the nineties. The trick is not to pick winners and losers. The trick 

is just to pick the winners. 

We know what the winners are. The winners are the technologies 

that give us clean air and clean water and that get us off oil. 

The question is where do we spend the next dollar. Do we keep 

cropping up the technologies that are polluting the environment 

and have most of the market share or do we start vetting on the 

technologies of the future, the ones that China and Europe and 

Asia are trying to corner the market on, the ones that are going 

to generate all the high wage jobs. 

At some point, governing is about making choices. I think we 

want to choose clean air, clean water and clean energy jobs. 

Chairman LEVIN. Ms. Harbert, I quoted you, so you have the 

last word. 

Ms. HARBERT. Thank you. I think actually everybody has made 

very good points. We are talking about a healthy economy, and a 

healthy economy depends on a diverse set of energy resources going 

forward. 

Our investment strategy to spur the broad sweep of new technologies, those types of strategies should be diverse as well. 

Strength and diversity. 

When government tends to get in there and manage those 

choices, it tends to pick the losers, actually not the winners, as we 

have seen by past government failures. 

What we want to see is actually have investments made in a 

broad set of technologies and then to let the market eke out the 

efficiencies and the most competitive technologies rise to the surface. 

That is good for the economy. It is good for the consumer, and 

ultimately it is great for exports. 

We want to make sure that we are leveraging financial resources 

from Government along with private capital and expertise and not 

have one crowd out the other. 

Chairman LEVIN. Thank you. Mr. Camp. 

Mr. CAMP. Thank you very much. There has been a lot of good 

testimony today. One of the things that troubles me about what I 

hear is somehow oil and gas production tax credits do not work but 

they are fantastic when they come to wind, solar and renewables. 


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I guess my concern is given the pamphlet that the Joint Committee on Taxation gave us that said that if you increase the price 

of domestic fuels, and I am quoting, ‘‘It will primarily result in substitution of foreign fossil fuel sources for domestic sources.’’ 

You are not going to go to renewables. You are going to go to importing more foreign oil. Obviously, one of the things we want to 

try to achieve is energy independence here. 

I guess I would ask Mr. Pickens and Ms. Harbert, how would increased taxes on domestic oil and gas producers affect our dependence on foreign oil in your opinion? 

Mr. PICKENS. Excuse me. I did not hear you. 

Mr. CAMP. How would increased taxes on domestic oil and gas 

producers affect our dependence on foreign oil in your opinion? 

Mr. PICKENS. It will not. Take the IDC, the intangible drilling 

costs, and remove that, it cuts your cap X for the industry by 30 

percent. There go jobs. There go wells drilled. There are reserves 

un-found. 

The industry has gotten us in a spot where we are competitive. 

It is up to us now to go ahead and execute, which we have not 

done. You need to point to the natural gas and say this is going 

to go into transportation fuel. 

I know a comment here about eight million 18 wheelers is not 

going to fix energy for America. No. Some place, you have to start. 

You have to start. 

Let’s say you do the eight million 18 wheelers. That is what we 

have in the country. Those go to natural gas. It is the largest target with the smallest number of people to carry it out. 

If that happened overnight, it will not, but it will happen over 

7 years, if that happened over 7 years, we would cut OPEC in half. 

That is 2.5 million barrels a day with only eight million 18 wheelers. 

I am going after the most attractive, quickest target. 

Mr. CAMP. I understand. Ms. Harbert, it is going to be some 

time before you can power a manufacturing plant with wind or 

solar. 

Ms. HARBERT. That is absolutely right. You cannot put wind 

and solar in your gas tank yet. 

Mr. CAMP. Not yet, and you cannot power a large manufacturing facility, whether it be an automobile plant or other manufacturing plant, with wind or solar yet. 

If these incentives for domestic manufacturing of oil and gas and 

domestic production of oil and gas are taken away, as proposed in 

the President’s budget, what effect will that have on our domestic 

oil and gas industry and our dependence on foreign oil and job creation? 

Ms. HARBERT. I think it has three immediate impacts. The first 

is it is hard to explain if we want to decrease our dependence on 

foreign oil, why would we make domestic oil and gas more expensive, because what that sends to the market is a signal that says 

take your money elsewhere. That means take your jobs elsewhere. 

If we take our money and our jobs elsewhere, that is bad for the 

economy. It also then does not bring more domestic resources of 

which we know now we have even more than we thought we had, 


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and those resources will not be brought to the benefit of our economy, so we will import more. 

As I said, in 1986, we saw what happened when we enacted the 

windfall profits tax, on the very companies we are talking about. 

We increased our imports by 19 percent. We are still paying for 

that bad mistake. Do we want to pay for it again? 

Mr. CAMP. Thank you. I see my time is expiring. Thank you, 

Mr. Chairman. 

Chairman LEVIN. Mr. Rangel will inquire. 

Mr. RANGEL. Thank you, Mr. Chairman. 

Mr. Pickens, let’s not talk about your age in terms of how we 

have to expedite doing the right thing because it scares me. You 

are going to live a long time but our time to get this time is short. 

I want to thank you for the great contribution you have made. 

I just want to ask you quickly, since everyone seems to say that 

your program in terms of natural gas makes a lot of sense, have 

you run across any arguments that you would like to present or to 

state that we should be looking out for? 

Is there any downside as to why we should pay more attention 

and provide incentives for the discovery of natural gas? 

Mr. PICKENS. The natural gas is the cheapest—— 

Mr. RANGEL. We are with you. I am asking you have you heard 

anything contrary that you would want to share with us. 

Mr. PICKENS. No. Let me add this one point. When somebody 

does say Boone, you do not know what you are talking about or 

Boone, there is something else, I always ask them okay, what is 

better than what I am talking about. 

Then they say, well, I do not like yours. I say then you like foreign oil. 

Mr. RANGEL. Makes a lot of sense. My time is going too fast. 

Do you think there is a need for incentives for the oil industry 

to produce more oil? 

Mr. PICKENS. I did not hear the question. 

Mr. RANGEL. Do you think that it is necessary for the United 

States to continue to provide incentives to increase the production 

of oil? 

Mr. PICKENS. Well, oil is not natural gas. You know that. 

Mr. RANGEL. I know my question. I am concerned about your 

answer. 

Mr. PICKENS. My answer is the incentives as you have given 

have not increased oil but has increased natural gas. 

Mr. RANGEL. Do you believe it is necessarily to subsidize oil any 

further and we should concentrate on natural gas? 

Mr. PICKENS. I would leave the industry as it because it is providing what we want. We have an abundance of natural gas. 

Mr. RANGEL. Would you ever think that we should target these 

incentives and subsidies in other industries such as natural gas 

and alternatives and not consider just removing some of the subsidies as an increase in tax? 

Mr. PICKENS. If I was going to tax anything, I would tax foreign oil. I would not tax your domestic industry. 

Mr. RANGEL. Okay. Very good. Dr. Sachs, let me say publicly 

how proud I am of the work that you have done over the years in 


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so many areas and certainly America and the world has complimented you for these initiatives. 

It seems that you agree with Mr. Pickens that we do not have 

a plan and that we should have one. I am certain the Administration would think they do have a plan. 

Honorable Harbert, your testimony, is that on behalf of the U.S. 

Chamber of Commerce? I know it is mentioned in your testimony. 

Have they adopted the so-called ‘‘plan?’’ 

Ms. HARBERT. This is a plan that we have presented on behalf 

of the Institute and the Chamber to the Administration and the 

Congress. 

Mr. RANGEL. Dr. Sachs, have you had a chance to see or hear 

about the plan that the U.S. Chamber would have? 

Mr. SACHS. Unfortunately, I do not know the details of the 

Chamber plan. I liked many things that I heard just now, but I do 

not know—— 

Mr. RANGEL. Could you help us out in the Committee by reviewing her plan and any other plans that has broad based support 

and see whether you can take the initiatives that the Administration has presented and see whether you could tie that up into 

something we could call a ‘‘plan’’ and that the Committee could 

look at, and feel free after we get that—we can feel free to see 

where people think priorities should be given so we can work with 

the Administration and tell them that what they have done may 

be a little bit disorganized, but we are going in the right direction? 

That would be very helpful. 

Mr. SACHS. Congressman, I would be happy to do that. Let me 

add they acknowledge they do not have a plan at this point. 

Mr. RANGEL. All the more reason I will be depending on you 

and anyone else that you would be willing to share your reputation 

with, and maybe we can get a plan going. 

Mr. SACHS. Wonderful. Sounds good. 

Mr. RANGEL. I yield back. 

Chairman LEVIN. Thank you. Mr. Stark. 

Mr. STARK. I thank the panelists for their input. I have two 

issues. Dr. Sachs and Dr. Romm are the only other MIT trained 

persons here. 

I am concerned that under a cap and trade policy, economics 

being what they are, that extra amounts could be allocated and we 

would run into a trading frenzy in Iran or something else. In other 

words, the cap and trade thing could become a market fiasco. I 

think there has been some evidence of that where it just got too 

complex and carried away. That is a concern. 

My other concern is that my suspicion is that my idea 20 years 

ago of a carbon tax might be a lot simpler. Some of you might like 

it. Some of you might not. I wonder if any of you would care to 

comment on that, Mr. Sachs, Dr. Romm and Ms. Harbert, whether 

that fits in. 

Mr. SACHS. Congressman, I am not a fan of cap and trade. I 

think it would be a very cumbersome, complicated way to accomplish things that can be accomplished in a more straightforward 

and with more powerful incentives. 


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A carbon tax, for example, is a far more persuasive policy. The 

reason we do not advocate it in our politics is it has the ‘‘T’’ word 

in it, not because it is a poor policy. 

Mr. STARK. Or a fee, whatever. 

Mr. SACHS. Some combination of clear subsidies for low carbon 

and taxes for emissions is far superior from an administrative 

point of view, a transparency point of view, and an incentive point 

of view than the cap and trade, which is unpersuasive on all three 

counts. 

Mr. STARK. Can the Chamber live with that, Ms. Harbert? Go 

ahead, sir. 

Mr. ROMM. I think the central point is the outcome which is to 

reduce pollution and clean up the air. From my perspective, you 

need a price on carbon. You need a shrinking cap on emissions and 

a rising price. 

The House already passed a bill that is called ‘‘cap and trade.’’ 

It is not a perfect bill. I actually think it is a very good bill and 

it would transform the U.S. economy. 

It is entirely possible to design that system so that Wall Street 

does not get rich. You simply do not allow—you only allow the industries that are regulated to own permits. You do not allow anyone else to own permits. 

Obviously, the term ‘‘cap and trade’’ has been quite successfully 

demonized. I think the people who do not want to take action to 

preserve clean air, clean water and a livable environment are going 

to go after any system and demonize it. 

I think one has to keep one’s eyes on the prize, which is making 

polluters pay for their pollution and using that revenue to jump 

start the transition to a clean energy economy. 

I do not really care what you call it. I think the House is to be 

commended for the bill that it passed. We will see whether you can 

get 60 votes in the Senate for anything like that. 

Mr. STARK. Ms. Harbert. 

Ms. HARBERT. I will just make two quick points. I think you 

raise a very, very good point, that people should be very concerned 

about. We are talking about creating the biggest market ever in the 

history of our Nation. 

There is a great deal of concern that can be manipulated, that 

it will be very non-transparent, and there needs to be significant 

effort given to the oversight, not just of the market but also of the 

industries that have to comply with the market. 

Second, the Waxman-Markey bill that was alluded to, if that is 

the cap and trade mechanism that people would want to support, 

let’s look at what the EI said that would achieve in terms of renewable energy expansion. It would take renewable energy, wind and 

solar, from 2 percent to 6 percent. We are creating a huge expensive market and we are just going to triple renewable resources. 

What are we really achieving? 

Mr. STARK. Thank you, Mr. Chairman. 

Chairman LEVIN. Mr. Herger. 

Mr. HERGER. Thank you, Mr. Chairman. 

Ms. Harbert, in your testimony, you explain how difficult it is to 

get any type of energy project built, specifically, you noted that 

over 380 projects representing 250,000 direct jobs and $560 billion 


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of capital investment have not been brought online because of regulatory barriers. 

Of those 380 projects, I believe you testified that 40 percent were 

renewable energy projects. Can you give us a sense of just how significant these regulatory barriers can be? 

Ms. HARBERT. They are almost insurmountable. If you talk to 

anybody in the energy industry, anyone in the manufacturing industry and other facilities that are applying for permits from the 

Federal Government and state governments, it is nearly impossible 

to break through this hugely burdensome process. 

If we are going to be competitive and globally competitive with 

countries like China, we have to be able to get things built in this 

country, whether it is a wind farm, a solar array, a natural gas 

pipeline, a natural gas facility, we cannot get anything built. 

Capital is on the side lines. Jobs are not being created. It is a 

huge, huge problem. 

Mr. HERGER. Ms. Harbert and Dr. Sachs, you both mentioned 

in your testimony the need to expand the use of nuclear power as 

part of a comprehensive energy security plan. 

I think this is a very important point that deserves to be discussed. I am a big believer in the ‘‘all of the above approach.’’ We 

need to step up domestic production of all sources of energy and 

that includes renewable, but the fact is according to the Energy Information Administration, we get more energy from nuclear power 

than from all types of renewables combined. 

At the same time, we are far behind other countries in maximizing our nuclear capacity. France, for example, gets over 75 percent of its energy from nuclear power versus about 20 percent here 

in the United States. 

What are some of the specific policy measures either on the tax 

or regulatory side that would be effective in encouraging greater 

use of nuclear power in the United States? 

First, Ms. Harbert. 

Ms. HARBERT. Thank you for the question. You are right. There 

is a huge opportunity to expand the use of emissions free nuclear 

power in this country. Right now, it takes, one estimates, since we 

have not done it in a very long time, about 10 years to get a project 

through the permitting process, and in France, it takes five. In 

China, it takes five. We need to streamline the permitting process 

to get these new facilities to enter into our economy. 

We also need to raise the loan guarantee authority that is currently within the Department of Energy so we can get more than 

the two or three that are going to be permitted with the current 

loan guarantee authority. 

We also need to make sure that the risk insurance program that 

was authorized by this Congress is actually utilized and in sync 

with current capital costs, since they have gone up since this Congress initiated that program. 

Let’s streamline it. Let’s make sure the loan guarantee authority 

is properly financed, and let’s ultimately make sure that the manufacturing capability is brought back to this country so we can manufacture the components here in this country to supply what is a 

badly needed new supply of clean emissions free electricity. 

Mr. HERGER. Thank you. Dr. Sachs. 


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Mr. SACHS. Congressman, I agree with those statements, but I 

would say that broadly, this is a matter of public acceptance and 

therefore, it is fundamentally a matter of political leadership, and 

that is as part of what I believe is vital, a comprehensive national 

plan with the arithmetic in it, mind you, so that we really see 

where we are going quantitatively. 

The President could and should explain to the American people 

why nuclear power has a safe and important role as part of an energy strategy. With that, I think we would make much faster advances on the specifics that were just referred to. 

Mr. HERGER. Thank you. 

Chairman LEVIN. Mr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. Dr. Sachs, Dr. 

Romm, I agree with my colleague, Mr. Stark, or I think I do, that 

you are not going to get anywhere in this country unless the Congress sends a very powerful signal, either cap and trade or a carbon tax. You can comment in a second. 

I have a second question I want you both to respond to. I want 

you to be policy wonks at the moment, not politicians. Do not bring 

in politics. 

Tell me why you would spend one more dime on coal and clean 

coal technology and all this nonsense with all the water it takes 

and all the problems. 

In the New York Times today, Germany has a story about the 

villages do not want to do carbon sequestration under the Earth. 

You already have the problems in the first plant built in the world 

to do this. 

I would like to hear one reason why we should spend another 

dime on coal in this country. 

Mr. ROMM. From my perspective, obviously coal has 50 percent 

market share in electricity or almost 50 percent. It has been declining in recent years. 

I do not think as a matter of public policy that you throw a lot 

of money at 19th Century technologies that fundamentally are 

dominate in the marketplace. 

The point of public policy is (a) is there some benefit like public 

health or the environment that is missing in the market or (b) do 

you have a new technology you are trying to get into the marketplace. 

Coal has many detrimental effects and many health consequences for both the workers and the people who have to breathe 

the air. 

I have a lot of questions about that. The only interesting technology in the entire arena of coal is carbon capture storage. Can 

you gassify coal, split out the carbon and bury it underground? 

I think it is worth pursuing that as one of many technologies. I 

think the evidence is it is unlikely to play a major role for two decades. I would want to make one point very clear. 

If we are not going to price carbon, I would not spend a nickel 

on carbon capture storage. If you do not price carbon, carbon capture storage will never ever make sense. It will always be cheaper 

to just vent the carbon dioxide. 


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Mr. MCDERMOTT. You are basically saying if we do not have 

either a cap and trade market or a carbon tax, coal, there should 

not be another penny spent on it? 

Mr. ROMM. Honestly, I do not see why; no. 

Mr. MCDERMOTT. Dr. Sachs. 

Mr. SACHS. Congressman, quantitatively, coal is so important 

for the world energy supply, including our own, that if we were to 

rule out coal, our prospects economically would be far, far grimmer 

than if we can include coal. 

We really need to check whether coal can be used safely, and we 

do not know that yet because in the last 10 years, we have not succeeded in making one real scaled project on carbon capture and sequestration. 

Mr. MCDERMOTT. Why? Tell me why that has not happened. 

Mr. SACHS. Because the previous Administration did not work 

hard enough at it. 

Mr. MCDERMOTT. They were in the oil company pockets. 

Mr. SACHS. I think one could have a lot of theories but they did 

have a future gen project which in 7 years, nothing ever happened. 

I think this is a tragedy because this is the same amount of time 

that it took us to get a man to the moon and back, and we could 

not build one coal fired power plant to test carbon capture and sequestration during that period. 

I would say, Congressman, it would be of the gravest consequence if we cannot use coal because it is by far the most plentiful fossil fuel on the planet, but we cannot use it the way we are 

using it now safely into future decades. We need absolutely to invest in analyzing the answer to your question, which is an unknown answer at this point. 

Since China is going to use its coal, absolutely. Since India is 

going to use its coal, since countries around the world are going to 

use their coal, we better find out whether this is safe. 

Since we have 25 states which produce coal, let me predict—you 

asked me not to—let me predict as a politician, we are going to use 

our coal, too. We better find out whether it is safe to use. 

Let me say as a policy wonk, a carbon tax is so much more 

straightforward, simple, predictable, and will drive the results 

where we want, and the only reason we have not done it, they both 

do the same thing in terms of pricing, but we have an allergy to 

a word and we have twisted for 15 years our public discussion because of an allergy to a word. 

They both have the same effect on consumer pricing. 

Mr. MCDERMOTT. Thank you. 

Chairman LEVIN. Mr. Neal. 

Mr. NEAL. Thank you, Mr. Chairman. 

Mr. PICKENS., I was intrigued by your comments that a good 

environmental policy can be a good policy for our economy as well. 

Like most in this town, I enjoy Tom Friedman’s columns, and he 

has argued that reducing our dependence on foreign oil is 

geostrategic, geoeconomic, capitalistic, and patriotic. 

You have cited a strategy that China has committed to with respect to acquiring oil and meeting their future energy needs. 


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Could you talk to us a bit about what China is doing and how 

it would impact their economy and where do you think the U.S. 

should be? 

Mr. PICKENS. First, China has a plan and we have no plan. 

They are carrying out their plan. In the last 18 months, they have 

either bought or made loans that tie up oil around the world. 

They made loans to Brazil. They have equity interests in North- ern Alberta, which was announced yesterday, bought $4.8 billion of 

the oil sands oil from Conoco-Phillips there. 

They have loans to the Venezuelans. They have loans to the Ira- nians. They have equity deals, $64 billion worth of equity in oil 

they have purchased, and they spent over $200 billion. 

I mentioned the Iraqi deal. I am telling you, these guys are everywhere. They will look at any oil deal in the world. A deal that 

has not been announced but will be shortly, they are buying 20 

percent in the Santos Basin in Brazil. 

What does that mean? Why did they not buy 100 percent? All 

they need is 20 percent to get in a position to control the other 80 

percent. 

They have a plan. What is going to happen, what we are going 

to find is in 2 or 3 years, that oil that would have been on the market is going to China. They have already made a deal for it. They 

are not in the market trying to buy it. They have bought it or tied 

it up in some fashion or another. 

If we go out 10 years from where we are today and do nothing, 

we will be importing 75 percent of our oil and we will be paying 

$300 plus a barrel for it. We cannot stand it. That is $1 trillion a year that will be going out of the country where today we are only spending $350 billion. 

It will be three times what we are doing now to buy oil for America. You know, you all talk about carbon and coal and these other 

things. This is a security issue that is absolutely—it will be a crisis 

state in less than 3 years. 

This has to be addressed. How we get off oil from the enemy. 

Mr. NEAL. Thank you, Mr. Chairman. 

Mr. STARK. [Presiding.] Mr. Johnson from Texas. 

Mr. JOHNSON. Thank you. I agree with everything you have 

said, Boone. I wish people would listen. 

Ms. Harbert, you state the role of the private sector in our future 

security is paramount. I think we agree. We ought not to try to 

crowd out their participation, capital innovations or expertise. 

From your perspective, is the private sector currently being 

crowded out by Government policy and control? 

Ms. HARBERT. I think we are at a crossroads, Congressman, because at the moment we have the potential of being taxed and regulated into very uncompetitive positions, whether it is through the 

oil and gas industry and putting punitive taxes on a single industry that the other parts of our economy currently enjoy or whether 

it is on picking a winner and overly subsidizing for an endless 

amount of time another part of our economy or it is in the banana 

syndrome, where we cannot get anything built, so our capital markets are frozen because we cannot get anything built because of a 

burdensome regulatory process, or a very litigious society, where 

every project is brought to the court system. 


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There is more energy policy being set in the courtroom today 

than in the halls of Congress. That should be of grave concern to 

you as every project is being litigated in the D.C. Court, the Court 

of Appeals, to see whether we can take it forward. 

We do have the prospect of being taxed and regulated and litigated into a very uncompetitive position. 

Mr. JOHNSON. That is just Government control. You think the 

private industry can take care of themselves if we give them a 

chance without taxing them to death? 

Ms. HARBERT. In every major crisis in the past, we have delved 

into the deep well of American innovation and we have succeeded. 

We have developed the technologies to solve whatever challenge we 

had, and that would equally apply to our energy and environmental challenges. 

If we are allowed to innovate, if are allowed to deploy these resources, we have the markets and we actually have been able to 

break down the tariff and non-tariff barriers around the world to 

actually export our technologies. 

We worry today about imported oil. We should be worried about 

imported intellectual feedstock, because unless we innovate and develop the technologies and sell them, the inverse will be happening. 

I think it is a warning bell to the government that the private 

sector is looking to other markets. We have companies in the State 

of Texas, in the drilling area, that are moving to Europe, because 

it is easier to compete there, and they have less of a tax burden 

in Europe than they do in the United States, because of double taxation. 

Mr. JOHNSON. You are saying we ought to lower taxes and not 

put some kind of higher tax on. Even incentives, I do not think, 

work as well. 

Thank you very much for your comments. Boone, I appreciate 

what your comments have been. I agree with everything you have 

said. Mr. Chairman, I yield back. 

Mr. STARK. Thank you. The Chair recognizes Mr. Yarmuth. 

Mr. YARMUTH. I thank you very much, Mr. Chairman. 

I want to ask Mr. Abate, as you know, GE’s plant in Louisville, 

in my District, announced last year that it would bring back from 

China production of a hybrid heat pump, water heater, electric 

water heater, and begin manufacturing that high efficiency product 

and appliance part. 

How can Congress help GE and other companies continue to increase U.S. production of great products and create more green producing jobs? 

Mr. ABATE. Yes, Congressman. We are excited about that. As 

you know, there are several appliances that fall under this incentive. Currently, that incentive expires this year. 

We would like to see that extended. We think it accomplishes a 

couple of great goals. One is energy efficiency and technology leadership. 

If you look at what we are doing now with our appliance products, they are leading the world as far as energy efficiency, and as 

a result, reducing the demand, which is part of this whole climate 

problem as well. 


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We would like to see that program continue, and that is what we 

support. 

Mr. YARMUTH. Thank you. 

Mr. STARK. The Chair recognizes Mr. Doggett. 

Mr. DOGGETT. Thank you very much. First, I agree fully with 

the emphasis that my fellow Texan, Mr. Pickens, has placed on energy independence, on reliance on American natural gas as a vital 

transition fuel, as we move to a cleaner energy future. 

I think it is particularly important for places that are relying on 

coal to move to natural gas as well as some of our transportation 

fleets, and I also recall that the original Pickens Plan placed a 

great deal of emphasis on American wind power. I think it is clearly a vital component of our future. 

I find any significant reliance on coal—I have always viewed the 

term ‘‘clean coal’’ to be a little like the term ‘‘dirty poison’’ or ‘‘safe 

poison,’’ a conflict in terms. A bit more problematic. 

I support fully the effort of President Obama and his budget to 

eliminate wasteful tax expenditures for the coal industry, but find 

particularly problematic—you referred to this, Dr. Romm, in your 

testimony—the addition of provisions by the Senate in 2008 that 

they have stuck on the extender’s bill that we passed over here, 

specifically coal to liquids and the refined coal credit. 

Let’s talk about coal to liquids first. That seems to me to be— 

you referred to it in your written testimony—a good way to waste 

a substantial amount of water, a substantial amount of tax money, 

tax resources, and to generate a product that is more polluting, carbon polluting, than if we just used the petroleum based products 

that we already have. 

Mr. ROMM. No question about it. Like I said, I have sat through 

as part of the Defense Science Board actually a taskforce on Defense Department energy strategy, because the Defense Department itself is trying to figure out how to come up with secure liquid 

fuels. 

There is just no study, no independent study that finds any net 

significant public value from coal to liquids. These are staggeringly 

expensive technologies. 

It cost $5 billion just to build a coal to liquids plant capable of 

producing 80,000 barrels a day. 

Mr. DOGGETT. I think we can put a lot of natural gas trucks 

on the roadway for that. 

Mr. ROMM. For that kind of money, you can get a lot of clean 

energy. You can get a lot more natural gas, and I am certainly a 

supporter of natural gas as a bridge fuel. 

The other thing about coal to liquids is it uses a staggering 

amount of water. It is something like five to seven gallons of water 

are necessary for every gallon of diesel fuel that is produced, and 

double that if you co-produce diesel fuel and electricity from coal. 

This country is not making more water. In many parts of this 

country, they are suffering with more and more water shortages. 

I just do not think it makes a lot of sense as a matter of public 

policy to be subsidizing coal to liquids. I have a figure in here, a 

chart in here, which shows from the perspective of heat trap and 

greenhouse gases, coal to liquids is more than double that of regular diesel fuel and almost any conceivable alternative, including 


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just turning natural gas into liquid diesel fuel, which would also 

make a great deal more sense, frankly, than turning coal. 

Mr. DOGGETT. This refined coal credit, it was the second one 

added on. It sounds a lot like the boondoggle that was called the 

‘‘syn fuel credit’’ back in the 1900s where people would spray on 

a little coal tar or pine tar or starch theoretically to change the 

substance of the coal to milk the Treasury. 

Can you comment on this refined coal credit and whether it offers any benefits? 

Mr. ROMM. I just would like to say—— 

Chairman LEVIN. [Presiding.] Do it briefly. I have just been told 

we are going to have votes fairly soon. We are going to face a dilemma. 

Mr. ROMM. I think it does not make any sense to incentivize the 

greater use of coal. The only context in which it makes sense is a 

climate bill that places a price on carbon and then you do want to 

find out if carbon capture and storage is viable. 

These other coal tax credits are just subsidizing the combustion 

of a fuel that harms human health directly. 

Mr. DOGGETT. Thank you. 

Chairman LEVIN. Mr. Thompson. 

Mr. THOMPSON. Thank you, Mr. Chairman. Thank you all for 

being here to testify. 

Mr. Abate, one of the issues that I am interested in is the storage 

of renewable fuels. It is a problem right now. If we are able to solve 

it, we can do a lot of good, I think, by being able to address peak 

demand times and the like. 

I would be interested to know what your company, GE, is doing 

to advance the storage of renewables and what you think Congress 

should be and could be doing to help along those lines. 

Mr. ABATE. Yes, Congressman. I think you are correct to be 

talking about storage. Clearly, it is going to be a challenge that has 

to be addressed. 

In our view, on a massive scale, it is more of a 2015 and beyond 

timeframe, other than places like Hawaii or other land constrained 

regions. The country currently has the ability to put in a lot of renewable power over the next several years and manage it with the 

system we have. 

If you look at what we are seeing as the wind is continuing to 

get installed, it is very complimentary to natural gas. 

This country has built hundreds of billions of dollars of tremendous gas turbine generation, very efficient combined cycle systems, 

so the way we are storing wind energy today is we are essentially 

leaving the gas in the ground or leaving the coal in the ground, and 

there are control systems to make that all work and they are really 

part of the focus we have now. 

Longer term, we are investing in battery storage and other technologies. We just announced a battery plant in Schenectady. We 

are looking at this more as an R&D effort. 

I think the question is the cost effectiveness going to be there. 

Today, if I sold a turbine to a customer that had storage capability, 

I do not think they would pay me twice the price for it, and you 

need to get to a point to be able to pay for the equipment that goes 

in it. 


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It is going to be cost challenged. Tax credits to support to continue the investment but long term, companies are going to need 

that to be able to get the penetration levels over 10–15–20 percent 

on a big scale. 

Mr. THOMPSON. Thank you. Dr. Romm, we are told we can save about $50 billion in energy costs by providing greater efficiency for energy industrial and manufacturing sectors. 

What do you think Congress should be doing to help promote 

that? 

Mr. ROMM. I think there is no question about that. I think a 

couple of these tax credits, the combined heat and power, the recycled energy, expanding that, I think that is critical. 

The amount of energy that is wasted and wasted heat that goes 

up our smoke stacks is equal to all the energy Japan uses for every 

purpose. 

Capturing some of that energy in industry and power generation 

is critical. Of course, the manufacturing tax credit that was in the 

stimulus, I think, has been very successful. It needs to be extended 

and expanded. I think there is probably general consensus on that. 

Mr. THOMPSON. Mr. Pickens, you had mentioned that if you 

had to tax something, you would tax imported oil. I have heard 

from a lot of folks in my district that is something they think we 

should be doing, that will help drive us away from there, capture 

those tax dollars, and then use that to address our energy issues, 

use that money to address our energy issues here. 

If we could do that and without running afoul of some of the 

trade stuff that we have to deal with, do you see any problems that 

might accrue from that, any externalities that might surface? 

Mr. PICKENS. No, but I think you may have the trade problem 

on taxing the foreign oil, but I would not be opposed to taxing gasoline. 

I think we are going to need money from somewhere. We know 

that. Gasoline tax, no question, it would cut consumption, and that 

would be good if we did that. 

The cars would become more efficient. We will go to light duty, 

more to a hybrid, which is good. 

Once again, anything that is American, I am for. If we could cut, 

for instance, let’s say we could cut OPEC in half in 7 years, that 

would recover for us $100 billion a year back into the United 

States. 

I do not know valuable that is. Let me take you back to a point 

I want to make. I may not get a chance to do it. Go back to the 

security issue for 30 seconds. That is all I need. 

The State Department recommends that we not travel to countries that we get 40 percent of our oil from, excuse me, 40 percent 

that the OPEC oil is from. Forty percent, they recommend we not 

travel there. 

If that is not getting oil from a questionable source, I do not 

know what it is. Just say that 40 percent of the OPEC oil cut us 

off, you would be talking about two million barrels a day. You 

would be looking at 200 to $300 a barrel of oil in a minute if that 

happened to us. 

We have got to get loose from this. 

Mr. THOMPSON. Thank you. 


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Chairman LEVIN. We are going to have four votes. I think in 

fairness to the panel, we should try to finish. 

Mr. REICHERT, you are next. There are three or four others. Do 

you think you would agree to 3 minutes so we can finish? Let’s try, 

okay? 

Mr. REICHERT. I always seem to be in this position. I am just 

pleased to be here, sir. Thank you. 

Chairman LEVIN. So am I. 

[Laughter.] 

Mr. REICHERT. Thank you, Mr. Chairman. I am pleased to take 

3 minutes. 

I want to focus on the job question. Ms. Harbert, if I could direct 

my question to you. We are here today to consider some tax incentives to spur development of new energy. 

Americans want jobs. They want new energy, but they want that 

energy, as Mr. Pickens has said, to be American energy. 

If it is natural gas or whatever else we can imagine into the future as the new energy source to power our vehicles and our factories, boy, would it not be nice to be secure, as Mr. Pickens also 

said, to have that security, have jobs, have the economy going, so 

there is a balance here that we have to strike, I understand. 

I just want to ask you a question. We have been working together. The American people also need to know there is bipartisanship occurring here in this Committee. 

Mr. KIND and I are working on a bill that actually puts together 

a package of tax incentives for energy efficient retrofits of homes 

and buildings. It is H.R. 4226, if you on the panel are interested 

in looking at it. 

Not only is Mr. Kind a part of this, but Mr. Davis of Kentucky, 

Mr. Blumenauer, Mr. Thompson, Ms. Schwartz and others. 

The question I have is you have noted the savings that such efficiency measures can produce, can you comment on the job creation 

potential of incentives for energy conservation and how retrofitting 

homes and buildings can get more Americans back to work, and 

second, still focusing on the job issue, which is the number one 

issue for Americans today, in terms of creating more immediate 

and sustained jobs in the near term, would you say energy efficient 

tax incentives bring a greater return on our investment compared 

to other energy incentives or large scale subsidies? 

Ms. HARBERT. Thank you for that question. I will try and be 

brief. First of all, on energy efficiency, the next best source of energy is the one we currently waste every day, so we need to make 

it attractive for people who are moving new commercial buildings 

and are in existing buildings to actually put in the infrastructure 

necessary to save energy, and that will create manufacturing jobs 

here. 

It will create the development of technology, some of which is GE 

and others, they will be selling the technologies and the appliances, 

et cetera, to improve the efficiency of what consumes a significant 

amount of energy here in the United States. 

It is an opportunity to create some jobs and certainly to save energy. 

On the broader question about creating jobs, we need to think 

about this, not just about creating green jobs, but about creating 


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a healthy economy. We need to create 20 million jobs over the next 

10 years, and clearly not all of those are going to be green jobs. 

We have to be realistic about what percentage of those are going 

to be in the energy industry versus how much are actually going 

to be in unrelated industries. 

We need to make sure we have affordable energy, reliable energy, that will underpin a healthy economy and not self select 

which parts of the economy and which parts of the energy economy 

we seek to stimulate. 

Mr. REICHERT. Thank you. Mr. Chairman, I yield. 

Chairman LEVIN. Thank you very much. Mr. Larson and then 

Mr. Blumenauer. 

Mr. LARSON. Thank you, Mr. Chairman. Thank you for this 

thoughtful and provocative hearing. I want to thank all of the panelists. 

I especially want to give a shout out from the people at Augie’s 

and Ray’s in East Hartford to Mr. Pickens and thank him for being 

there back in November. 

It seems as though there is great unanimity amongst the panel 

that we do not have and have not had for more than 40 years a 

plan as it relates to energy. It also seems there is general consensus about the need to be comprehensive in our approach. 

There also seems to be an awful lot of consensus that in terms 

of natural gas, there is unanimity that this is definitely a way we 

should go. 

Mr. Pickens raised an intriguing point. He said he was not opposed to taxing gas. Mr. Neal raised the point early on about 

Thomas Friedman and his articles about how we continue to export 

dollars abroad that essentially go into the hands of our enemies 

who essentially arm the very terrorists who are going after our 

troops. 

A question to the panelists, and we will start with Ms. Harbert, 

would you agree with Mr. Pickens that if we are looking at something to tax, that gasoline perhaps is the way to go? 

Ms. HARBERT. I will go back to something that Chairman 

Bernanke said earlier this week, which is we are in such dire financial straits, we are going to have to raise taxes or cut spending 

or do both. 

I think before we decide what we are going to tax, we need to 

fully explore all the options so that we do not increase the burden 

on the American taxpayer. 

Mr. LARSON. Would you be opposed taxing gasoline? 

Ms. HARBERT. I think we are talking about how much and 

what the revenue would be used for. If it just evaporates, then it 

is not seeking to do anything useful for the economy. 

Mr. LARSON. Let’s say the revenue is put into building 18 

wheeler trucks and powering them with natural gas, the plan Mr. 

Pickens has laid out? 

Ms. HARBERT. I do not know how you actually put that revenue 

there. I think it is an excellent question. The question for policy 

makers to think about is how much in this economy and what 

would the money be used for ultimately. 

Mr. LARSON. Let me go down the list of the panelists. I know 

our time is brief. 


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Mr. ROMM. I tend to prefer to raise the price on pollution rather 

than one particular fuel. I think the revenue should largely be 

given back to the consumers and businesses. Some used for clean 

energy. At some point, we are actually going to have to reduce the 

deficit, but I think the focus has to be on reducing pollution and 

promoting clean energy at this point. 

Mr. LARSON. Mr. Sachs. 

Mr. SACHS. I think a gasoline tax makes sense, but one that I 

do not think is fully reflected in our conversation today is the incredible opportunity with electric vehicles to absolutely affect positively many of the dimensions that we are talking about right now. 

If we go to electric vehicles in a significant way over the next 15 

years, our oil dependence drops considerably. We get clean vehicles. 

We have a much more flexible power system, and we get storage, 

by the way, of intermittent power sources because the batteries of 

a vehicle fleet will vastly provide the storage that we are going to 

need to smooth out the peaks of demand. 

One thing that any comprehensive energy plan should have in 

this country is attention to the conversion of our fleet, the automobile fleet, not the 18 wheelers, but the automobile fleet, to electric vehicles. That is within reach and that is where America 

should take a technological lead, and this committee should help to 

do that, I think. 

Mr. LARSON. Mr. Abate. 

Mr. ABATE. I would just comment that relative to security and 

pollution, diversity and domestic content, I think there are many 

aspects and many ways you can go at this. The question is what 

problem are you trying to solve. 

I would look at this more holistically than just one particular target. 

Mr. LARSON. Mr. Pickens. 

Mr. PICKENS. It was my idea. I like it. 

[Laughter.] 

Chairman LEVIN. I think that ends that discussion. That is the 

best short answer we have heard in quite a while. 

Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. I appreciate the 

reference. I think it may have been Dr. Romm talking about the 

water limitations, something that has not come forward. 

Our ethanol costs 28 gallons of water per mile. One of the big 

limitations in nuclear, and it is going to be a bigger problem in the 

future, is that it is the most water intensive of our energy sources, 

and in a time of global warming climate change, reducing snow 

pack, it is going to be harder to have the water to do it. 

I have been taken aback a little bit by some of the conversation 

here today about picking winners and losers. I appreciate some of 

our panel pointing out that the United States has been in the business of picking winners and losers, starting with the transcontinental railroads through the Internet and according to Mr. 

Abate’s testimony, it looks like our efforts at betting on a green 

economy is paying some dividends right now in terms of diversity 

of energy supply and creating jobs. 

I like the notion that several of you mentioned, Mr. Sachs and 

Mr. Pickens, about having a vision for how this fits. Not just an 


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energy policy. I would be prepared to argue that it is for how we 

rebuild and renew America, transportation, water, energy, all of 

this ought to fit together. 

There is a way to finance it. I am pleased Mr. Pickens talked 

about gas tax. Others of you did. The Chamber has testified here 

before this committee that they would favor a 5 or 10 cent a gallon 

increase now. 

I am hopeful that we can think a little different about the cost 

equation, because a lot of costs get swept away. We have had reinforced in the last 10 days the cost of coal production, 100,000 

Americans have lost their lives in the coal industry. How we factor 

in mining lives, air pollution deaths of coal, bulldozing mountain 

tops into streams, there is a lot going on here. 

The thing that is most vexing for me is I am hearing that somehow if we make a small adjustment in some of the subsidies, that 

it is going to destroy our oil and gas industry in the United States. 

My recollection is our per barrel price in the last 3 days has varied from about $84 to about $85.94. That, I think, is a global price 

for a fungible product. 

I would like to know what any of our witnesses think would happen to the global oil price and global oil production if a few hundred million or a few billion dollars are factored out of what for the 

United States is two-thirds of $1 trillion a year, in a global oil market. 

What is really the impact that is going to be and who is going 

to get the benefit? Global oil markets or it will be somehow just the 

United States? 

Mr. Sachs, do you have something you want to say? Others can 

chime in. And if you think we do not have a global oil market. 

Mr. SACHS. We definitely have a global oil market and if I understand your point, Congressman, small changes that we make 

domestically are not going to be the main drivers of the global oil 

price. That is absolutely certain. 

Mr. BLUMENAUER. Does anybody else here dispute that? Mr. 

Pickens. 

Mr. PICKENS. I am not going to dispute it. I would like to comment. 

Mr. BLUMENAUER. I want to get the point here, that it is a 

global price and oil companies are going to go where they can make 

money on the oil price, the global oil price. 

Mr. PICKENS. Let me just comment. If you get on natural gas, 

your own resource, you can bring the price of oil down, but as long 

as you go back to the global market for more and more oil, all you 

do is send a signal that you are there and you are going to have 

to pay for it. 

There is 85 million barrels of oil produced every day in the world. 

We are using 21 million. We are using 25 percent of all the oil with 

4 percent of the population. 

Mr. BLUMENAUER. I agree with your point. I want to get to 

the notion that somehow if $1 billion is lost out of all these subsidies, that somehow that is going to have a profound effect on the 

global oil price, and if it works, we are going to lower the price of 

the oil for people around the world. 


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Ms. HARBERT. Congressman, that is two different questions, I 

think. 

Mr. BLUMENAUER. Mr. Chairman, I would welcome a written 

follow up. 

Chairman LEVIN. Yes, let’s do that. 

Mr. BLUMENAUER. I would really welcome the facts on that. 

Thank you. 

Chairman LEVIN. I think this is going to work. Mr. Boustany, you 

are next, and then Mr. Pomeroy. 

Mr. BOUSTANY. Thank you, Mr. Chairman. 

Chairman LEVIN. It is Mr. Boustany, Mr. Davis and then Mr. 

Pomeroy. There are three of us left to inquire before those bells 

ring. Let’s try to do it in 3 minutes each. Thank you. 

Mr. BOUSTANY. Thank you, Mr. Chairman. Dr. Sachs, I appreciate your very succinct statement of the three goals. I think that 

is important, and the fact that we lack a strategy and we need a 

strategy. I think there is a big difference between strategy with regard to energy versus just policy. 

Also, the need for a realistic transition strategy. I think we all 

have been talking a little bit about natural gas. I know Mr. Pickens 

has made that a big focus. 

I am very concerned because we have the appeal of certain tax 

provisions in the President’s budget proposal with regard to the oil 

and gas industry, and these will hit our smaller independent operators, American producing companies, that hire a lot of folks in my 

State of Louisiana and Texas and the Gulf Coast. 

We know what happened in 1986 with the windfall profits tax. 

We lost a lot of really good workers who dispersed around the 

globe. We lost a lot of technical know-how, and our imports, as Ms. 

Harbert pointed out, jumped 19 percent. 

We have to make a distinction between oil and natural gas. I am 

concerned about these tax increases that will also have an impact 

on our natural gas industry. Natural gas is at a pretty cheap price 

right now. If you put these taxes on the natural gas producers, it 

makes it less likely they could extract gas, particularly from shale, 

which is more expensive. 

Mr. Pickens and Ms. Harbert, I would like you to comment on 

that. I know with hydraulic fracturing, there is a lot of talk about 

making it more cost prohibitive for the regulations on it. 

This is going to hurt our energy security in the long run, would 

you not think? 

Mr. Pickens, if you do not mind? 

Mr. PICKENS. If you increase taxes, it will cause a problem. Of 

course, it will. We have the cheapest natural gas in the world 

today. We are cheaper than Mideast natural gas. It is obvious that 

the industry has delivered on the natural gas. 

The technology has been advanced. Everything has worked in 

this way. 

I do not think it is time to tax them. If we get on the natural 

gas, it is the cheapest—let me give you a quick comparison. For 

one MCF of natural gas, it equals seven gallons of diesel. One 

MCF. That is $4. Seven gallons of diesel is $21. 

We are paying $21 for foreign diesel and we have a resource in 

America that we could replace it. By the way, the natural gas is 


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33 percent cleaner than diesel. You get every advantage here at a 

fraction of the cost. 

Mr. BOUSTANY. Ms. Harbert. 

Ms. HARBERT. I think you have three immediate impacts. 

There would be a disincentive to produce. There will be a disincentive to innovate and develop technologies that will increasingly 

allow us to produce these resources cleanly, and it will drive the 

smaller guys out of business. That is bad for America. 

Those businesses cannot leverage that risk in other operations 

and other parts of the world where some of the larger companies 

can. The smaller guys go away. We reduce the ability to produce 

and we certainly take away the incentive to innovate. 

Mr. BOUSTANY. Thank you. 

Chairman LEVIN. Thank you. Mr. Davis. 

Mr. DAVIS of Illinois. Thank you very much, Mr. Chairman. Dr. 

Sachs, you state rather succinctly in your written testimony that 

energy policy will not solve the short term job crisis over the next 

18 to 24 months, but unless we have a sound energy policy, the 

short term crisis is going to become a long term crisis. 

How impactful do you think our energy policy or lack of is on the 

overall job crisis that we face? 

Mr. SACHS. I think that already the lack of a clear energy and 

climate strategy, remember, I am talking about the mix, is weighing heavily on our capacity to generate good jobs over a time horizon of 5–10–20 years. 

I am very worried about the fact that we cannot decide what 

kind of power plants to build. We cannot decide what kind of industries to sponsor right now. We cannot decide what to do with electric vehicles, to really make it work. 

That is where we are going to lose lots of jobs down the road. 

What I am saying is I do not think in the next 18 to 24 months 

any of this is decisive, but 5–10–15–20 years, how viable is our 

economy going to be if we are facing instability, soaring prices, and 

we have not resolved any of our technological leadership in these 

areas, then it will be very serious. 

Mr. DAVIS of Illinois. Thank you. Mr. Pickens, you make a real 

case for increased use of natural gas. Why do you think it is so difficult to have your thoughts, ideas and concepts really become a 

core part of our energy policy? 

Mr. PICKENS. I did not hear the last part. 

Mr. DAVIS of Illinois. I like your positions. Why do you think it 

is so difficult? 

Mr. PICKENS. The reason we are in the spot we are in, very 

simply, is we have never had the leadership that said let’s use our 

own resources, but in defense of that decision or the lack of a decision, we have had cheap oil. 

Cheap oil keeps coming to us and it is so easy to have it and to 

use it, but go back to Nixon in 1970. He said at the end of the decade, we will not import any oil, any oil in the seventies. At that 

point, it was 24 percent. At the end of the decade, it was 28. Today, 

it is 68. We will be in 10 years at 75. 

Because of cheap oil, we keep drifting and drifting. All at once, 

whether it be in the closer I get to the end, not of my remarks but 


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of my life, the closer I get to the end, the more I realize that divine 

intervention does show up from time to time. 

This is exactly where I see us today. We got lucky. We got lucky 

and came up with four thousand trillion cubic feet of natural gas. 

It is cleaner. It is domestic. It is competing against foreign dirty 

and it is cheaper. 

How in the world did that ever happen? I just gave you the reason I think that. 

Mr. DAVIS of Illinois. Thank you very much. 

Chairman LEVIN. Mr. Etheridge, I think you are next and then 

Mr. Pomeroy, and if we each take 3 minutes, we will be in good 

shape. 

Mr. ETHERIDGE. Thank you, Mr. Chairman. 

Mr. Pickens, let me ask you a quick question. I remember before 

I came to this body, I was a state superintendent of schools in 

North Carolina. I had a few buses on natural gas. I assume they 

are still operating. 

My question is broader than that, not only are we talking about 

buses and trucks, what do you see as the challenge, because the 

bulk of the fuel used in this country really is in automobiles and 

small vehicles, but what do you see as the challenge if you move 

to natural gas in those as well? 

Mr. PICKENS. The light duty? 

Mr. ETHERIDGE. Yes, sir. 

Mr. PICKENS. This is the way I see it unfolding. Go ahead, and 

we are hunting with a rifle here, not a shotgun, so we are going 

after the eight million heavy duty. Go ahead and go after those. Go 

after them hard and let’s do it quickly. 

Then let the good tentacles that will come out of that go wherever they want to go into the transportation, and do not pick winners in this. I think there is a very good chance that light duty will 

go to the hybrid or go to the electric car. Let it go. Get off the 

OPEC oil. 

Go ahead and give your model at the top, the biggest users using 

20,000 gallons a year per vehicle, go for those, knock them off, and 

then I think natural gas will just have to compete for the light duty 

with whatever else is available. For heavy duty, we only have one 

choice. 

Mr. ETHERIDGE. Thank you. Mr. Abate, you spoke about how 

important it is giving businesses the ability to plan with renewable 

energy production tax credits over a period of time. 

As you know, there has been tremendous growth in green jobs 

since some stability was put in the tax credits. What are the prospects of continued growth in these areas if that is instituted and 

we put together a plan for the long term? 

Mr. ABATE. If we have a plan for the long term, you will see 

this industry continue to grow. I think right now, there are a lot 

of challenges, as I stated in my testimony. I think clearly the next 

couple of years, we are living more off the backlog versus a new 

order activity and project development occurring going forward. 

I think everybody is waiting for a plan similar to Europe with 

a 20/20 or the directive in China—a 100 gigawatt commitment. 

Once that commitment is made, this country is going to build out 


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a real infrastructure and you will see investments in factories happen very fast. 

We have right now 12 suppliers that we want to bring to this 

country, but by the time they come online, those projects will be 

operating in 2013. There is no policy for renewable energy in 2013. 

They will not make that investment until that timeframe is extended. 

Mr. ETHERIDGE. Thank you. Mr. Chairman, I yield. 

Chairman LEVIN. Mr. Pomeroy, you get the last. 

Mr. POMEROY. Thank you, Mr. Chairman. I thank the panel for 

their long indulgence. 

Mr. Abate, I would just observe that North Dakota with its fabulous wind source as well as a magnificent blade manufacturer, as 

well as a magnificent tower manufacturer, is only missing a turbine manufacturer. This is not a question. I just note it for the 

record. 

Mr. Pickens, you electrified the audience with your vision of 

greater roles of wind and natural gas. I want to ask, we did not 

get a chance to discuss it extensively on that occasion. 

I will direct a question here while you talk to Charlie. I will come 

back, Boone. 

Ms. Harbert, you indicated, I think, an important point, that advancing the tax proposals of the Administration relative to fossil 

fuels, oil, especially, would hurt production, hurt innovation, and 

diminish the participation of independent players in developing 

this resource. 

In North Dakota, just to put a case study on what you have said, 

we have had principally independent oil producers, basically 

through extraction innovation, horizontal drilling and the fracking, 

untap the miracle, that means four billion barrels of recoverable oil 

in North Dakota alone, domestic supply. 

Clearly, this has been built on the Tax Code as it presently is, 

and as we build out development of this major oil play, bringing 

greater oil sufficiency to our marketplace, abolition of these provisions of the Tax Code would clearly reduce the rate we recover this 

domestic supply now made available in part because of the structure of the existing Tax Code. 

Is that correct? 

Ms. HARBERT. These are long term investments that need certainty, and introducing and changing the type of contractual 

underpinnings would be very, very bad policy and it would have 

very big implications on production and innovation and the size of 

the businesses you are talking about. 

We have huge reserves. Why would we be doing something to 

constrain the production for the benefit of our economy right now? 

Mr. POMEROY. Mr. Pickens, as someone with such long involvement in the industry, I would like your comment on that for the 

balance of my time. 

Mr. PICKENS. Long involvement is right. I got out of school in 

1951 as a geologist and I have been in it ever since. 

The Bakken and Williston Basins, North Dakota, of course, is 

part of the Williston Basin. That again, you have a question, that 

oil showed up at a funny time in America. I mean a funny time, 

a good time, a fortunate time for us. 


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Four billion barrels is a lot of oil. It is a lot more oil than we 

found in the last 10 years in the United States. 

You are going to find technology is going to advance us a long 

way, but you do not want to slow down the industry at this point. 

Turn them loose. Let them go. Try to fix the problem. 

Mr. POMEROY. Thank you very much. 

Chairman LEVIN. Mr. Camp. 

Mr. CAMP. I also want to thank the panel. This was a very helpful panel. I appreciate all of your time and effort and your good testimony. Thank you very much. 

Chairman LEVIN. I want to very much say to all of you very, 

very busy people involved in so many activities, many, many 

thanks. It has been informative, and I think really a brilliant 

panel. 

I think it helps lay the foundation for further work of this Committee. 

We will stand in recess. The third panel has been very patient. 

My guess is we will be back in about half an hour to 45 minutes. 

Around here, you are never quite sure. We stand in recess. We will 

start with the third panel as soon as we are back. 

[Recess.] 

Chairman LEVIN. The Committee will come to order. Mr. Camp 

and I and our colleagues are really very sorry. There was intervening business and it made the delay any longer. You are the 

most patient people in town, at least at the moment. 

What we will do is start the hearing, and we will make sure your 

testimony is very well distributed. We will take extra steps to 

make sure what you present is considered. 

We will go down the line. Stephanie Burns, Dr. Burns, is Chairman, President and Chief Executive Officer of Dow Corning in Midland, Michigan. 

The Honorable Reed Hundt, Chief Executive Officer of the Coalition for Green Capital. Welcome to you. 

The Honorable Rod Dole, who is the auditor, controller, treasurer, tax collector, four hats, of Sonoma County, and I think Mr. 

Thompson, you want to say a special hello. 

Mr. THOMPSON. Just that he is a great guy. We have worked 

together for a long time, known each other for a long time. If anybody can handle all of those hats, he is the guy that can do it, and 

I am really glad you are here testifying on the great work that you 

are doing in Sonoma County on an issue that we all care a great 

deal about. 

Mr. DOLE. The respect is mutual. Thank you, Mike. 

Chairman LEVIN. Mr. Thompson reminds everybody as to where 

he comes from and the issues that matter most to him. 

Mark Bolinger is a Research Scientist with the Lawrence Berkeley National Laboratory, also in Berkeley, California. 

The Honorable David Bohigian is the Managing Partner of E2 

Capital Partners in Bethesda, Maryland. 

We give you a special welcome. I think, Mr. Bohigian, you have 

the least far to go after sitting here all day. We really doubly thank 

all of you for taking the time. 


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You probably were able to hear some of the last panel. I hope you 

were not here for the first panel, which means you would have 

been here all day. 

Again, a special thanks. I think, Mr. Camp, you agree, this has 

been a particularly informative panel, so we will be doubly sure 

that your testimony is well distributed and we hope well understood. 

I think we will start with you, Dr. Burns, and just go down the 

row, and if each of you would take 5 minutes. If you want, you can 

refer to your testimony. In any event, it will be entered into the 

record. 

STATEMENT OF STEPHANIE BURNS, PH.D., CHAIRMAN, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, DOW CORNING 

Ms. BURNS. Thank you very much, Chairman Levin and Representative Camp, for the opportunity to be part of this third panel, 

an important panel today, and to represent Michigan. 

As to the growth of renewable energy in America, in particular, 

solar is very important to me personally and professionally, as a 

scientist and as a Chief Executive Officer. 

I really do believe our country is at the dawn of a new energy 

era, a transformation that will provide more clean energy, options 

like solar, wind and other renewable sources, as well as energy efficiency products that will change the way we purchase and use energy in our lives and in our businesses. 

Dow Corning is one of the world’s leading manufacturers of silicon based products, contributing technology and materials along 

the entire solar value chain. Most notably, at the very beginning 

of the manufacturing process, with polycrystalline silicon. 

We are also involved in a number of energy efficiency technologies from automotives to appliances and especially in green 

building construction. 

As a result, I know firsthand that America’s energy transformation is inextricably linked to our Nation’s economic and manufacturing future. 

This transformation calls for new partnerships, requiring the 

joint leadership and investment of the government and private industry. Working together, we can achieve innovative policies and 

prescriptions that address education and workforce development, 

advancement in manufacturing, technology deployment and market 

readiness. 

With forward thinking leadership and management, this transformation will bring with it new industries, hundreds of thousands 

of new jobs, a sustainable source of economic growth and a reduced 

carbon footprint, all good for our country and for our global environment. 

For our part, Dow Corning has announced more than $5 billion 

in investments in solar technology and manufacturing capability in 

the past 5 years. 

While most of that is in capital for advanced manufacturing operations in polycrystalline silicon and in saline for flexible thin film 

solar applications, it also includes research and development to improve the performance and cost efficiency of solar cells and modVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00190 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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ules, and investments in training and education in our local communities. 

We have been on the receiving end of economic development offers from other nations, nations that have aggressive policies to 

support the growth of renewable energy in their country. 

Companies like ours predisposed to manufacture in the United 

States are attracted by foreign tax structures that encourage them 

to do otherwise. 

It is time for America to enact policies that will essentially assure this industry growth here. If we have a tax structure that encourages investments and job growth, coupled with an increase in 

domestic consumer awareness and demand for renewables, the U.S. 

will win. 

The advanced energy manufacturing tax credit included in the 

American Recovery and Reinvestment Act was a significant first 

step toward establishing that winning combination. 

The tax credit is encouraging companies like mine and our joint 

venture, Hemlock Semiconductor, to manufacture solar and other 

renewable energy components here in America. 

As a result, we are seeing thousands of jobs in construction, engineering, science and skilled trades. 

I am pleased to tell you that Dow Corning benefits from the advanced energy manufacturing tax credit. Our customers are benefiting and green jobs in our operations are real and affecting real 

families. 

As you know, this tax credit was capped at $2.3 billion, and was 

significantly over subscribed. That is a good thing. Both the White 

House and the Department of Energy indicate that many qualified 

projects were not funded. 

With that in mind, I hope this credit can be made permanent or 

at least long term in any energy climate or jobs bill now under development. 

The permanency will help businesses, large and small, plan for 

capital investments in the U.S., and more importantly, it signals 

that this country is serious about leading in the global renewable 

energy sector. 

To build on that and to truly implement the transformation before us, Dow Corning proposes a four point plan to address technical legislative regulatory manufacturing and workforce related 

factors that influence America’s ability to develop a thriving domestic renewable energy industry. 

First, we encourage Congress and the Administration to enact 

new Federal policies and regulations that will encourage the rapid 

development and deployment of energy efficient and renewable energy technologies. 

We can create new jobs and businesses and promote U.S. competitiveness in the global markets and improve the environment 

and increase our energy security. 

We propose a robust Federal renewable energy standard and 

Federal interconnection and net metering standards, all part of the 

larger effort to increase the adoption by Americans. 

I have already mentioned the immediate need for Federal tax incentives to spur domestic manufacturing and compete in the 

strength of foreign offerings. 


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Despite anticipated domestic growth in renewable energy installations, the majority of manufacturing occurs outside the United 

States, in such countries as China, Germany, Malaysia and the 

Philippines, roughly 40 percent of the manufacturing tax credits in 

high demand markets. 

Let’s make sure when a corporation is looking to build a manufacturing facility the competition is between the states here at 

home and not countries overseas. 

Second, we advocate for increased Federal funding for research 

and development to accelerate solar technology innovation and to 

advance solar manufacturing capabilities. 

We are already today ready to provide seed moneys for an American solar research consortium. Dow Corning has spearheaded this 

concept. We have customers, shareholders and universities ready to 

join us in this consortium, even the State of Michigan is committed 

to providing funds. However, the state requires a Federal match. 

Today, $6 million in Federal matching funding would move this 

consortium from a concept to immediate ground breaking, and this 

consortium would move solar technology faster to the marketplace. 

Third, we support the need to develop green collar workforces by 

supporting training programs, like the programs we are already cosponsoring with Delta College in Michigan and with Austin Peay 

State University in Tennessee, as well as training partnerships 

with non-profit organizations and centers of excellence at academic 

institutions nationwide. 

Fourth, we need the Federal Government to lead by example in 

the implementation of clean technologies, through procurement of 

on-site generation, building retrofits for energy efficiency, and new 

green building standards. 

Finally, but certainly no less important, Congress must ensure 

that new policies to reduce greenhouse gas emissions do not inadvertently discourage growth in the manufacturing and production 

of renewable energy sources. 

Yes, we are in favor of a Congressional solution to the greenhouse gas regulations. 

I am proud to be one of the more than 10,000 Dow Corning employees who are coming to work every day energized to be part of 

the solution. We are committed to a climate of collaboration, creativity and urgency for greater energy security. 

As a global company, we know that it is fundamental to protecting our Nation’s competitiveness in the decades to come, and 

fundamental for our economic growth. 

We are hopeful that Congress will continue to do its part by enacting policies and incentives to encourage private sector investments. 

I look forward to working with each of you as we move to a clean 

energy economy that protects our environment and secures energy 

independence. 

Thank you. 

[The prepared statement of Ms. Burns follows:] 


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Prepared Statement of Stephanie Burns, Ph.D., Chairman, 

President and Chief Executive Officer, Dow Corning 


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f 

Chairman LEVIN. Thank you very much. 

Mr. Hundt. 

STATEMENT OF REED HUNDT, CHIEF EXECUTIVE OFFICER, 

COALITION FOR GREEN CAPITAL 

Mr. HUNDT. Good afternoon, Mr. Chairman and Ranking Member Camp. I am here as the Chief Executive Officer of the Coalition 

for Green Capital. 

On a personal note, I would like to recognize the importance of 

Michigan on both the Republican and Democratic side. I was born 

in Ann Arbor and I will be going back there with my wife for the 

graduation of our son from the Ross School of Business in 2 weeks, 

assuming the President squeezes us in along with the rest of the 

crowd. 

I met many of the Members of your Committee a decade ago, a 

decade and a half ago, when I was the Chairman of the Federal 

Communications Commission. I mention that because not at all exclusively because of Federal regulation, but significantly because of 


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the 1996 Telecom Act, a bipartisan measure, that of course started 

in the House and eventually got through the Senate. 

Because of that, American entrepreneurs, private equity investors, investors from all over the world spent about $1 trillion building a new America’s communications network. Everything that we 

know today, whether we are Twittering or Blackberrying or making a cell phone call, is almost always on a network that was built 

some time between 1995 and today. 

That tremendous colossal private sector investment created 

about one-fifth of all of the jobs created in the 1990s, the 20 million 

new jobs that made the 1990s the best decade in our lifetime for 

American workers. 

It is that same rebuilding of our buildings in America so they are 

energy efficient and our electricity network, so that it is founded 

on a clean basis and a renewable basis, instead of a carbon emissions intensive basis, it is that same rebuilding in both respects, 

in the way we use energy and in the way we produce it that we 

will do two things. 

It will create again about five million new jobs, and it also will 

lead to absolute national security and world leadership in the effort 

to have a clean economy. 

In very, very broad terms, if we invest about $250 billion, private 

sector investment, in replacing existing building materials with energy efficient building materials, and about $250 billion, the same 

number, in replacing our carbon emissions intensive generation 

with the less carbon emissions intensive generation, those two 

numbers added together, $500 billion, should produce about five 

million new jobs, and should give us a reduction of about one-third 

of the total CO 2 emissions per year in the United States. 

That would take us into world leadership in terms of having a 

clean economy and in terms of carbon abatement. 

Right now, we are 11th in the world in the percentage of our 

GDP that we invest in the change to a clean economy, and we are 

dropping. China is getting farther and farther ahead. 

There are three problems, but first I am going to tell you, if you 

will permit me, I just want to urge two things of the many good 

things that could be mentioned, I want to urge that this Committee 

give serious support to extending Section 1603, the grant in lieu of 

the ITC, for as long as you can see a way to do it, and second, I 

urge this Committee support, as the Members have already done 

in the past, the creation of a green bank, such as introduced by 

Congressman Van Hollen in March of 2009 in the Green Bank Act, 

and as Congressman Van Hollen knows, whom I had the pleasure 

of voting for every 2 years, that provision was passed in the Energy 

and Commerce Committee 51–6. It is a truly bipartisan measure. 

Those are the two suggestions I am going to make. I would like 

to confine my remarks to describing the problem that I think those 

two measures would go a long way to solving. It is a three part 

problem. 

Problem number one. Because of the tremendous drop in the 

total output of the economy, starting with the events of 2008, we 

now have in the United States little or no natural market driven 

new demand for electricity. 


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There are a few states that are exceptions, but in most states, 

we have more potential output than we have demand, because our 

total overall consumer demand and business demand has dropped 

so far so fast. 

Therefore, if we depend on the market to demand new forms of 

electricity, we have to wait 6, 7, 8 or 9 years before that demand 

will materialize. 

Lucky China has the fastest growing demand market in the 

world and anybody can sell almost anything in that market. In the 

United States, we have to find a way to replace, not wait for new 

demand. 

Number two, electricity, of all the identical goods and services in 

our economy, none varies more in price state by state than electricity. It varies by as much as four times. The price in Kentucky, 

where Congressman Yarmuth is versus Connecticut, is almost a 

four times difference. 

That is because unlike beer and soap and telephone service, you 

cannot send it over a distance without a great expense, and also 

unlike many goods, you cannot really store it. 

Consequently, it needs to be made locally and it is consumed locally, which is why the prices vary so much on a state by state 

basis. 

The sad paradox is this. Where emissions are high and unemployment is high, the two places you would love to see jobs and see 

the emissions taken out, typically, that is where electricity is low 

priced. Michigan, Ohio, Kentucky, Illinois. 

Somehow, we have to find a way to create incentives for firms 

to put in emissions reduction technologies, for businesses to invest 

in that, and create jobs, precisely where electricity prices are low. 

One thing we cannot do, I think, as a practical matter, is say to 

the people in Michigan, at this particular point in their history, we 

know you are paying 9 cents a kilowatt hour, why do you not pay 

14 cents as a base the way they do in California, why do you not 

pay 17 cents as they do in Connecticut, why do you not pay 24 

cents the way they are doing in Hawaii. 

I would suggest to you that would not be a bipartisan measure. 

Somehow, we have to address these problems on a local state by 

state basis, and the third and last problem is this, it is just a fact 

that to have carbon capture for coal facilities or combined cycle natural gas or solar or wind, today, the unit economic costs are higher 

than if you were to build a coal generation facility. 

They will come down when firms like Dow continue to have scale 

and continue to innovate, but today, it is higher. 

Somehow, we have to lower the price of clean electricity and create a way for people to invest in those particular products and 

bring them into the market without saying to the consumer you 

have to lose, and without saying to the shareholders of utilities you 

have to lose. We do not want the consumer to lose. We want the 

consumer to win. We do not want the utilities to be punished because we want them to invest in this new activity. 

That gets me to the conclusion, which is as Congressman Van 

Hollen outlined in his Green Bank Act, if we create an institution 

that for 20 years, that was the chartered time in that Act, for 20 

years would provide low cost long term financing, and if we make 


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a commitment through tax policy, particularly the Section 1603 

grant, then those two concepts put together mean that it is possible 

for new investment and clean electricity generation, and new financing investment in replacing building materials with new efficient product. 

We can have those investments take place so that profit can be 

made and the consumers can be protected. 

Thank you very much. 

[The prepared statement of Mr. Hundt follows:] 

Prepared Statement of The Honorable Reed Hundt, Chief 

Executive Officer, Coalition for Green Capital 


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Chairman LEVIN. Thank you. 

Mr. Dole. 

STATEMENT OF ROD DOLE, AUDITOR, CONTROLLER, 

TREASURY, TAX COLLECTOR, SONOMA COUNTY, CALIFORNIA 

Mr. DOLE. Chairman Levin, Ranking Member Camp, other 

Committee Members, on behalf of Sonoma County, it is a pleasure 

to be before you. We are really honored for this opportunity. 

I am going to tell you a story. I am trying to see how I can bring 

my PowerPoint up. 

What I am going to do—I would like to tell you a little story first, 

a little background. In 2008, California passed Assembly Bill 811. 

It was authored by Assembly Member Levin in California, I 


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thought you would enjoy that, and basically what it did, it took a 

100-year system, a 100-year process, that exists in California and 

across this Nation, and it said for property assessments, where normally we would fund streets, highways, curbs, et cetera, we will expand that ability to energy efficiency, renewable energy, and water 

conservation. 

That is called ‘‘PACE,’’ property assessment clean energy. It was 

mentioned by Vice President Joe Biden in one of his recent speeches. 

It is again a 100-year process that was authorized to include 

these other abilities, and Sonoma County took that bill and implemented it. 

What I am going to show you is a simple process, and I am going 

to show you the results of that process. Basically, on the ground 

proof that what we have been talking about works. A program basically is authorized for $100 million. We have financed that ourselves. We are looking to long-term finance this 

program at low interest rates, and we will talk about that. In 12 months, we have taken in $41 million in applications. We 

are a half a million population county. This is a partnership between our cities and the county, nine cities and the county. We 

have processed and dispersed into our community over $23 million. 

We have paid for $23 million worth of projects, and we have $41 

million worth of applications going through our process. 

We offer this program at 7 percent fixed interest rate, and the 

program is set up to pay for itself, just like any bank. We borrow 

the money at 3 percent. We lend it to the property owner at 7 percent, and the 4 percent spread goes toward the operating costs of 

this program. 

That is how we have established this program. We finance water 

conservation, energy efficiency and renewable energy, and renewable energy includes solar, wind, geo-exchange. 

This just shows a map of Sonoma County. Hopefully, you have 

been to the wine country. Mike talks about that probably, and so 

do I. 

All nine of our cities are members of this program. 

One of the things we are impressed with is the value this is adding to the property. The property owners realize that if they volunteer, and this is a volunteer program, they enter into an application process, they agree, if you will, to tax themselves for the next 

up to 20 years in order to finance these improvements to their 

properties. 

What we have shown here is how that is broken down. Over half 

of the people are electing to do retrofit on their property, and a little less than half are doing solar or renewable energy. 

To date, we have actually generated 2.9 megawatts of new energy for Sonoma County. Basically, we could power up 800 homes 

for an entire year with what has been generated over the last 12 

months with this program. 

This is just to give you a sense for the growth. The top line there 

is our applications on a weekly basis. We have been following this 

program from the beginning. Our first concern was that no one 

would come through the door and no one would fill out an application. 


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We did a professional marketing survey, and we found out that 

over 20 percent of our property owners would sign up with this program currently. What we really need is 50 to 80 percent of our 

property owners because we know one of the huge carbon emitters 

is property. 

The blue line there is our actual disbursements monthly. We 

make disbursements every month. As I said, we are over $23 million at this point. We are growing at a rate of about $2.5 to $3 million per month. 

This is just a breakdown. One of the side benefits to this is retail 

sales. In order to make improvements of property, you have to buy 

the materials. It is improving both goods and services in the area. 

This slide shows the growth in employment. The blue lines are 

the funded projects as they came in on a monthly basis. The red 

line is the jobs as shown to us by the California Employment Development Department of increase in green building jobs during 

that same period. 

The other way that we thought we would predict this is ARRA 

has estimated at the Federal level that every $92,000 put into the 

economy will generate a job. Our program to date should, under 

that guideline, have generated 252 jobs. That is just little Sonoma 

County. 

We are looking for a partnership. We need help in basically three 

areas, all of them in funding. We need long-term low cost funding. 

We need what we call ‘‘warehouse funding;’’ in order to sell bonds, 

we have to have volume. We have to have $20, $40, $100 million 

in contracts in place. 

What we are doing in Sonoma County is we are financing that 

until there is enough volume that we can sell long-term bonds, and 

there are investment firms and banks interested in buying those 

bonds, but there is some interest rate risk there. 

Many jurisdictions do not have the startup money for starting 

this program. It is relatively easy to replicate, but it needs startup 

money. 

In the case of Sonoma County, that startup was a line of credit 

for $1 million. We are probably going to use about half of that. 

The long-term funding, Congressman Thompson has been very 

helpful and very close to our program. He has sponsored H.R. 3525, 

which would allow tax exemption for these PACE bonds. 

We are also offering that maybe PABS expand the definition of 

‘‘capital expenditure’’ to include PACE bonds; it might be a better 

avenue. 

The energy bank is exciting to us because again it would provide 

low cost financing. 

The intent here is to pass low cost interest rates down to the 

property owner and make this even a better, more motivated program. 

With that, I am open to any questions. 

[The prepared statement of Mr. Dole follows:] 


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Prepared Statement of The Honorable Rod Dole, Auditor-ControllerTreasury-Tax Collector of Sonoma County, County of Sonoma 


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Chairman LEVIN. Thank you very much. Very interesting, indeed. 

Mr. Bolinger. 

STATEMENT OF MARK BOLINGER, RESEARCH SCIENTIST, 

LAWRENCE BERKELEY NATIONAL LABORATORY 

Mr. BOLINGER. Thank you, Mr. Chairman and Members of the 

Committee. My name is Mark Bolinger, and I am a research scientist at Lawrence Berkeley National Laboratory, where I conduct 

research on renewable electricity markets and policies, with funding from the U.S. Department of Energy. 


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The purpose of my testimony is to summarize findings from a 

preliminary Berkeley Lab evaluation of the first year of the section 

1603 Treasury cash grant program. 

As you know, this is a Recovery Act program that enables renewable power projects to elect cash payments in lieu of tax credits. 

Berkeley Lab’s selective review of this program was prompted by 

this Committee’s request for assistance in evaluating the program’s 

effectiveness, and I am submitting as part of my written testimony 

a recent Berkeley Lab report that responds in detail to the Committee’s request. 

Just to be clear, neither the Berkeley Lab report nor my testimony today advocates any particular policy position with respect to 

the section 1603 program. 

I should also note that the Department of the Treasury, which 

administers the program, did not participate in this evaluation 

other than as a data provider. 

With those preliminaries out of the way, our first key finding is 

that the Section 1603 program has been heavily subscribed, particularly by wind power projects. 

As of March 1 of this year, wind power had received 86 percent of the nearly $2.6 billion in grants that had been dispersed through 

this program, followed distantly by geothermal at 6 percent, solar 

at 4.5 percent, and biomass at 2.8 percent. 

In capacity terms, wind power accounted for nearly 3,900 

megawatts of the 4,250 megawatts of all renewable power technologies supported by the program as of that date. 

In addition, the Department of the Treasury has indicated that 

as of March 1, another 2,300 megawatts of wind power that were 

built in 2009 had applied for but had not yet been awarded cash 

grants under this program. 

In total, roughly 6,200 megawatts or about 62 percent of all wind 

power capacity built in the U.S. in 2009 had applied for grants as 

of March 1. More broadly, with the high proportion of both geothermal and biomass projects also choosing the grant, it is clear 

that the majority of all renewable power capacity built in 2009 

elected the grant in lieu of either the production tax credit or the 

investment tax credit. 

Some projects that have elected the grant have appeared to have 

done so opportunistically rather than out of necessity. For example, 

we estimate that if a section 1603 program did not exist, perhaps 

3,800 megawatts of wind power that had applied for the grant as 

of March 1 would likely still have been built in 2009 using the production tax credit. 

However, the costs imposed on the U.S. government by this opportunistic behavior consist primarily of the difference in the 

present value of the grant versus the production tax credit, which 

is a difference that we find relatively modest on average. 

Moreover, the flip side of this issue is that many renewable 

power projects built in 2009 do appear to have been motivated at 

least in part by the grant program. 

We estimate that as many as 2,400 megawatts of wind power 

representing almost one-quarter of all wind power capacity installed in the U.S. in 2009 may not have been built last year, absent the section 1603 program. 


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These 2,400 megawatts of incremental wind power have helped 

to retain or create jobs in the U.S. Using the National Renewable 

Energy Laboratory’s Jobs and Economic Development Impact 

model, or JEDI, we estimate that these 2,400 megawatts of wind 

may have supported approximately 51,600 short term full time 

equivalent gross job years during the construction phase of these 

projects, and 3,860 long-term full time equivalent gross jobs during 

the operational phase. 

Moreover, the JEDI model estimates that the majority of all 

wind industry jobs supported by the section 1603 program are located right here in the U.S. 

Now, I do want to emphasize that these jobs estimates are based 

solely on modeling runs and are therefore inherently uncertain. 

One must also recognize that these estimates are of gross rather 

than net jobs. In other words, the JEDI model does not account for 

the fact or the possibility that job gains in the wind industry will 

come at the expense of job losses in other parts of the energy sector 

or broader economy. 

A more fairer employment analysis would therefore need to consider such macroeconomic influences and focus on net rather than 

gross job impacts. 

Finally, the Berkeley Lab analysis touches on a number of issues 

and possible concerns with the design and implementation of the 

section 1603 program. 

One of these potential concerns is that the 30 percent grant rewards investments rather than efficient employment, which might 

call into question the types of incentives being created by this program. 

Based on the data currently available to us, however, we find no 

reason at this time for widespread concern with respect to either 

the cost or performance of projects that have received section 1603 

grants. 

With that, Mr. Chairman, I conclude my statement and I would 

be happy to answer any questions you may have. 

[The prepared statement of Mr. Bolinger follows:] 


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Prepared Statement of Mark Bolinger, Research 

Scientist, Lawrence Berkeley National Laboratory 


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Chairman LEVIN. Thank you very much. Your report was requested by you, Mr. Rangel. 

Mr. RANGEL. Stellar job. Thank you so much. 

Chairman LEVIN. In February of 2010. 

Mr. BOLINGER. That is correct. 

Chairman LEVIN. That is a fairly prompt response. 

Mr. BOLINGER. Yes. 

Chairman LEVIN. Thank you. 

Mr. Bohigian. 


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STATEMENT OF DAVID BOHIGIAN, MANAGING PARTNER, E2 

CAPITAL PARTNERS 

Mr. BOHIGIAN. Thank you, Mr. Chairman and Ranking Member Camp and Members of the Committee for the opportunity to 

appear before you today to discuss some key issues, and I want to 

say how impressed I have been with the Committee today and engaging in substantive discussion, and with all the panels, in what 

has been, I am sure, a long day for you. 

I am a small businessman. I am working to establish a firm that 

will deploy energy efficient equipment throughout commercial and 

industrial properties in the United States. 

What I am talking about is HVAC systems, lighting systems, 

windows, and climate control systems, that I am allowing the end 

user to avoid the up front costs, and we all share in the savings 

as that equipment is being used over years. 

My partner and I started this company because we believe there 

is enormous opportunities to do well and to do good. We need to 

solve key market barriers that have prevented the deployment of 

the cleanest form of energy, which is invisible, but it is there, it 

is energy efficiency. 

This business model has been proven to work in government 

buildings and in municipalities, universities, schools, hospitals. We 

are looking to extend that to the private sector, where most of the 

buildings are. 

Our success will not depend upon government grants, tax incentives or subsidies. Each of our projects has a positive rate of return 

without using taxpayer dollars. In fact, if you look at McKinsey’s 

studies on this, energy efficiency and the positive rates of return 

there in fact help pay for a number of the renewable energy technologies that we talk about. 

By using existing energy efficient technologies, that pay for 

themselves, the United States could cap its increase in energy demand and greenhouse gas emissions. 

While policy makers and the public are primarily focused on renewable energy, I believe minimal consideration has been paid to 

projects that deploy commercially proven equipment into existing 

commercial industrial buildings. 

Over my lifetime, energy efficiency has accounted for nearly 

three-quarters of the demand for new energy services. Today, energy efficiency alone is twice the size of the renewable energy market and can continue upon that pace for years to come. 

Businesses understand they must conserve energy to remain 

competitive. Although the benefits of energy efficiency are well documented and the demand for energy efficiency continues to grow, 

companies frequently choose not to deploy energy efficient equipment. 

In addition, vendors are not structured to finance their customers. In fact, the Department of Energy found that even with the 

median pay back of 1.3 years, more than half the projects they recommended were not accepted by industrial customers. This is not 

a credit story for the past 2 years. This is a 20 year survey of over 

40,000 projects they recommended. 

Of those projects that were rejected, a majority were rejected for 

financing reasons. 


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Thousands of energy efficient projects are being deferred every 

year. Realizing the potential of energy efficiency requires overcoming some of these obstacles. 

When the U.S. Government has focused on energy efficiency, it 

has primarily focused on retrofitting its own buildings, which I 

commend, as well as the residential sector, which I commend, but 

I would also like to talk more about how to incentivize the commercial and industrial sectors. 

I would also like to say it is my belief that I do not think our 

national goal should be trying to choose specific energy production 

or energy efficiency technologies to receive taxpayer assistance. 

I believe it should be generating measurable and identifiable and 

verifiable savings in energy intensity. 

In addition, while tax incentives have a role, I believe other 

mechanisms may be better suited to encourage the private sector 

and private investment without additional burdens to taxpayers. 

Our business model relies on measured and verifiable savings 

that create income streams without taxpayer assistance. 

Some public policy would be helpful, and I want to list five measures that I think could help. We have heard about the PACE program and allowing commercial building owners to pay for energy 

efficiency equipment through an annual assessment on their tax 

bill. 

This model being adopted in Sonoma and other state and local 

levels in this country have been primarily targeted at residential 

development. I would like to see that expanded to include the commercial sector as well and see if there is a Federal mechanism that 

might be able to help on the tax bill as well. 

In addition, the Title 17 loan guarantee program has been helpful, but it is targeted on new energy efficiency technologies rather 

than proven technologies. I believe looking at that program and 

seeing which technologies could actually help reduce our energy 

use and improve our energy intensity bears consideration. 

I believe that extending and potentially expanding the energy efficient commercial building tax deductions could be helpful. 

I think allowing more rapid depreciation of capital equipment 

and energy efficiency retrofits would also spur the market, and 

last, while it is typically a state and local responsibility, helping to 

develop model building codes that encourage energy efficiency 

through retrofits would be helpful. 

Building owners and policy makers at all levels understand that 

improving energy efficiency is the key to our competitiveness. 

I have talked to manufacturers and contractors and vendors in 

lighting, windows, heating, insulation, and other fields across the 

United States that have the ability and the desire to serve this 

market that are going to help create manufacturing jobs and insulation jobs in this country. 

I thank you for your time today and know that we stand ready 

to assist Congress in making American businesses become more efficient, competitive and create the jobs for the future. 

Thank you. 

[The prepared statement of Mr. Bohigian follows:] 


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Prepared Statement of The Honorable David Bohigian, 

Managing Partner, E2 Capital Partners 


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Chairman LEVIN. Thank you very much. I have a question. Let 

me suggest, Mr. Rangel, why do you not go and then Mr. Camp 

and then our colleagues, Mr. Johnson and Mr. Van Hollen, and 

then I will wrap it up with a question if you have not covered it. 

Mr. Rangel. 

Mr. RANGEL. First, let me thank all of you for your patience. 

This is rather unusual that we would have invited guests to come 

here and then we have to spend so much time on the Floor. I hope 

you heard me thank you generally without the mike. 

I also, Mr. Bolinger, would like to thank your outfit for the 

speedy action that you have taken and sharing with us whether 

these programs are working or not. 


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My question is to try to get a feel as to where our country is as 

it relates to conservation of energy. I think it goes unchallenged 

that as it relates to dependency on fossil fuel, climate, health, and 

all these things, that the urgency is well known by the political, 

manufacturing and economics’ circles. 

As it relates to the consumer, I am not convinced that on the 

issues that they think are important, that this even gets on the 

scale of what they want economists to do. 

I also believe that our country has put a lot of men and women 

in harm’s way in order to protect oil because of our dependency on 

this fuel, so there is no question that our national security, our foreign policy, our economic decisions are based on what we are talking about today. 

I do not know how many of you actually have driven down the 

highways during the days in every major city and see the lights are 

on. I do not know how many of you go to our towns and villages 

after 6:00 or 8:00 or 10:00 and see every light on, the air conditioner and the heat, whatever it may be. 

I do not remember hearing, except when my grandfather would 

give me hell saying put out that light, you are wasting electricity, 

which of course, it was a cost issue, and I have never forgotten it. 

All that we are doing in terms of providing tax credits and removing subsidies from oil, people get critical about what it means 

about their pocketbook. 

We had an experiment, I think, that we asked people to cut off 

electricity for 1 hour or 1 day of a year to see what the impact 

would be. Can any of you give me just a baseball park percentage 

of the waste of energy in terms of the American consumer? 

I do not want to get back to the Carter days and tell people they 

cannot have Christmas lights and they have to wear a sweater, and 

I do not want to put all the lights out in Times Square because it 

is a tourist attraction, and we need the money. 

I do not really think that people think we have a crisis to the 

extent that people are dying on the battlefields as well as with 

health problems because of this serious problem that all of you 

have studied, investigated, and thank you for the work that you 

are doing to put us on the right track. 

But are there any ideas about consumption that strike you that 

we are not doing? Mr. Dole. 

Mr. DOLE. One of the reasons we tried this program is we really 

felt the community was ready for a cultural change. They were 

thinking along the line that you were. One is that we need to conserve on energy. Two, we need to do the right thing. 

What we associate it with is sort of like recycling. Nowadays the 

communities, the population, they have an aluminum can in their 

hand, they’re looking for a recycle center. Our program is raising 

that consciousness, that culture, to turn off the lights. But even 

more importantly, to be more efficient in their use of energy. And 

that’s what our program has shown. 

Mr. RANGEL. Mr. Dole, your program is very unusual, and you 

provide the incentives, out-of-pocket expenses, improvement, and 

property, and a whole lot of things that a guy living in an apartment house in Harlem—besides that electricity bill. 


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But there is no sense in America that there is a national crisis. 

And I’m saying that we’re paying for this dearly, and the threats, 

in terms of what happens to our economy in the future, and China, 

and all of these other things, and we’re concerned about annoying 

our constituents and talking about taxes and climate control, and 

all the things they don’t understand. 

Do you think our government is doing enough there? Do you 

think Members of Congress are doing enough? Is the message out 

there, that conserving electricity—I mean it’s one thing to say, ‘‘We 

give you a tax incentive, you can buy the appliance and it costs 

less,’’ and people say, ‘‘Hey, if I can save a couple of bucks,’’ but 

I don’t see anybody lecturing their kids or grandkids about this 

being a national or international issue. I don’t. 

And make no mistake about it, come election times we want to 

do what our constituents want us to do. And if this is not on their 

agenda at the town hall meetings, we will wait until after we are 

reelected for the educational bit. But the priority is going to be getting reelected. And we just hope when we tell them this they don’t 

think that we’re just lecturing to them. 

And I feel there is a vacuum. Does anyone agree? Do you think 

Americans are sufficiently educated to know how serious the problem is? 

Chairman LEVIN. Anybody want to take a brief crack at that? 

Mr. DOLE. I would like to agree with Mr. Rangel. I think that 

the fundamental problem is that in order to have more efficient 

windows, or more insulation in the ceiling or whatever is the specific step, if you go to the consumer or to the business in the building, the proposition right now is, ‘‘Please take money out of your 

pocket, invest it in this structure, and over the course of time there 

will be savings and you will be glad you made the investment.’’ 

But, Mr. Rangel, you are absolutely right. A renter doesn’t really 

do that math and say, ‘‘I would like to spend the money.’’ If your 

mortgage on your house is bigger than the value of the house, 

you’re not thinking, ‘‘I want to put more money into this house. 

Maybe I won’t even be able to stay in this house.’’ If you might lose 

your job, you are thinking, ‘‘I need to save the money for food. I 

don’t have time to make an investment that won’t pay off for 5, 6 

or 7 years.’’ 

The overwhelming majority of Americans, they can want to save 

that money on the electricity bill, but they have done the math in 

a variety of ways, and they’ve reached the conclusion that they just 

can’t do it. 

So, one of the virtues of a green bank would be to loan money 

at the kind of low rates that we were just told about in the PACE 

program, and to loan it to the people who will have the incentive 

to make these investments over a long-term, to loan it to commercial real estate owners, to loan it to utilities who are then able, 

over the course of time, to hire people to go in and do the projects, 

to loan it into the kinds of businesses that Dow not only is, but also 

that constitute Dow’s customers. 

Mr. RANGEL. That works. 

Mr. DOLE. That will work. 

Mr. RANGEL. And I appreciate it. But how could we go on a 

highway and see the lights on, as all of you have seen during the 


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daytime without saying, ‘‘My God.’’ He’s not a terrorist, but somebody is letting America down. 

How do we see buildings with no one in them closed, and all the 

lights on? There has to be something about consumption, that we 

just ignore that as we go after the homeowner and give incentives. 

I’m just saying I don’t think America really knows how serious this 

problem is. And I want to thank you for what you’re doing. 

If you are satisfied there is nothing else to be done in terms of 

national education, then I will have to find another panel someplace else. But right now, I want to thank you for your contributions. What you are doing is important, but I think it’s a drop in 

the bucket, in terms of how urgent the problem is. Thank you. 

Chairman LEVIN. Mr. Camp. 

Mr. CAMP. Well, thank you. Thank you, Mr. Chairman, and I 

want to thank all of you for being here, and for your testimony. I 

just have a couple of questions. 

Mr. Bohigian, can you just elaborate a bit on the types of measures—just quickly, because I know time is very limited here—on 

the measures you can take to reduce energy consumption in buildings and industrial facilities, as you testified, and compare that— 

the environmental benefits and net reductions—and compare that 

to converting a building to an entirely different type of energy. 

Do you have any—or if you can’t quickly answer that, if you 

could, get back to me in writing on a comparison of the two approaches, because we have heard a lot about alternative forms of 

energy, and I would just like to see the cost and benefits of moving 

forward on the approach that you have outlined. 

Mr. BOHIGIAN. Well, on a national scale I will give you an idea. 

As we talk about 2 to 4 to 6 to 8 percent as our percentage of renewables that we’re using in the economy, our typical projects are 

20 and 30 percent savings at the building level. 

So, it’s clear to me, as I said, over the past 40 years, energy efficiency continues to account for the lion’s share of energy savings 

in this country, and the generation and renewables simply can’t 

match that in the short term. 

Mr. CAMP. All right, thank you. And, Dr. Burns, I know that 

Dow Corning and their joint venture, Hemlock Semiconductor, 

manufacture solar and other energy-related products. And I know 

that’s a very energy-intensive industry. And I know that—and I 

think, for example—I have heard this, if this is accurate—that 

Hemlock Semiconductor is the largest single point user of energy 

in the entire state of Michigan. 

Ms. BURNS. Either the largest or second, yes. 

Mr. CAMP. Yes, up there in—one of the top. Can you tell me how 

sensitive you are, as a company, to higher energy costs and the 

comparisons between costs, both regionally and internationally? 

Ms. BURNS. Yes. I mean, this industry is extremely sensitive to 

energy costs, because it takes a lot of energy to produce this very 

pure material that goes into the solar cells and modules. 

On average, the energy that we use is converted into energy savings of about 10 to 15 times that. So, these solar cells that last 20, 

25, 30 years obviously save a lot of energy in their lifetime. But the 

actual production of the raw material takes a lot of energy. We are 


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very sensitive to it. It is one of the top components, in terms of deciding where to locate our manufacturing plants. 

And, fortunately, we were able to choose Michigan and Tennessee, primarily because of the incentives and the good rates that 

we were offered. But on a globally competitive basis, that is clearly 

something that other companies are looking at. About 100 new 

polysilicon plants are announced to go into China right now. And 

a lot of that is driven by labor costs. A lot of it is driven by the 

government’s priority on solar and renewables, and on attractive 

energy rates that clearly are coming through government support. 

Mr. CAMP. Well, I think that’s an important point. While the actual facility is a high-energy user, as you go downstream into the 

actual manufactured product you see significant energy savings 

with the use of the solar products that are manufactured. 

Ms. BURNS. Correct. 

Mr. CAMP. So, as you look just at one entity, you might view 

them as a high-energy user. But as you get further down the chain, 

it changes dramatically. 

I also wanted to mention—I have just a few minutes left—the 

Manufacturing Jobs Creation Act that Congressman Mike Thompson has introduced, and a number of Members of the Committee 

are cosponsors, including Chairman Levin and myself. The bill, obviously, would make capital investments in plants and machinery 

eligible for a 30 percent investment tax credit already offered 

under section 48. 

Can you just comment on the investment and employment impact you might expect such a credit would have? 

Ms. BURNS. Yes. I think it would be huge, and I am a strong 

supporter of this proposal. We are the very first step in the value 

chain. Most of the intermediate steps are not done in the United 

States of America. Most of our product that is shipped offshore is 

converted into cells and modules and then for the U.S. market, it 

gets shipped back. 

We have customers who want to invest in America. They want 

to put their manufacturing plants here, because this is where the 

growing market is for solar. 

This will help them make that decision. This will be an incentive 

that is more globally competitive. It will give them certainty in 

their investments and predictability in terms of their returns. 

We have many customers who would like to co-locate in Michigan 

and Tennessee because our material shipment to them would be 

extremely efficient. 

Many of them are Asian customers who do not know how to maneuver in the regulatory and political environment in the U.S. And 

are seeking our help and support and partnership to do this. 

I think it would be huge and I strongly encourage it. 

Mr. CAMP. Thank you very much, Mr. Chairman. 

Chairman LEVIN. Thank you. Mr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

I served in the state legislature in the 1970s and 1980s during 

the era of ‘‘oops,’’ and I watched utility guys come in and tell me— 

they would draw these lines about how demand was going to continue to go up. 


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You are saying, Mr. Hundt, that it is a little off at the moment 

for whatever reason and those lines do not make much sense, and 

it seems to me the conservation part of this is really what is most 

important at this point to really get up on top of not only from a 

green jobs standpoint but from an availability of energy at the moment. 

I would like you and Mr. Dole to talk about both the qualified 

residential energy efficiency bonds and the credit bonds, in terms 

of is there anything we need to do to make them work better or 

make them more usable by local governments? 

I sponsored this stuff when we put it in before. For me, it is an 

oversight question. Is it working? Please tell me. 

You can talk about Sonoma County, but you can talk about the 

country. That is why I wanted the two of you. 

Mr. HUNDT. Yes is the answer. First, as to electricity demand, 

normally, it goes right with GDP. In the year we have just gone 

through, this very difficult year, it is down about 3 percent. You 

would expect it to be up about one to 2 percent every single year, 

not enough demand to cause a lot of investment really in anything 

new. 

It is going to be necessary, if we want to take the CO 2 out of 

the air, it is going to be necessary to replace building materials 

that are already installed with something more efficient, and to replace carbon intensive generation with something that is less carbon intensive. 

We have a replacement story in the United States and a growing 

economy like China, they have a meet new demands story, which 

is why they are on a path to be number one in solar and in wind 

and in hydro and in coal and in nuclear. 

Mr. MCDERMOTT. Is our tax structure tailored to the question 

of replacement rather than new demand? 

Mr. HUNDT. No, it is not. When we talk about—it is certainly 

true that this Committee in the last 18 months has done many, 

many important things that have re-tailored the structure, but in 

order to say for the next 10 years and starting right away so you 

can really build projects that can come on stream in the next 10 

years, do we have that kind of a commitment yet? Predictable longterm, large scale? We do not. 

Do they have that in China? Absolutely, they do. 

In terms of international competitiveness. 

Mr. MCDERMOTT. Competitiveness, and in terms of putting our 

people to work right here in our own country, making that longterm, large-scale commitment to a beneficial tax policy and a very 

favorable financing environment. That’s the special province of this 

extremely important committee. It is also an absolute necessity in 

the United States. 

Very, very specifically, the green bank, as designed in Mr. Van 

Hollen’s bill, would have the power to—and I think absolutely 

should, among other things—make loans to PACE programs so that 

some of the startup costs that we heard about could be provided 

from that particular green bank. Otherwise, you’re asking too much 

of local entities, in terms of just doing it on their own. 


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Mr. DOLE. I believe your second question—and thank you for 

that question—regarding the QUIBS. The issue for us was that our 

allocated portion of the QUIBS was, like, $5 million. 

Mr. MCDERMOTT. Nothing. 

Mr. DOLE. As you could see, our disbursements per month are running about $2.5 million to $3 million. So we would have gone 

through a lengthy process, but only have received $5 million. The 

reality was—— 

Mr. MCDERMOTT. Why was it allocated that way? Was it the 

capital—— 

Mr. DOLE. It’s allocated based on population. So each state gets 

a share, and then each local jurisdiction got a share. When we did 

the math, our share was $5 million. We realized early on that, in 

order to have a viable program that could actually sell bonds later 

on to the markets, we needed to build a volume of at least probably 

$100 million to $200 million in contracts. 

So, it was very helpful. Unfortunately, the amount was so small 

that we just needed a larger share. We had hoped and discussed 

with other organizations about the idea of maybe creating a competitive process. 

So, in other words, if Sonoma County wanted to show the leadership, could demonstrate that it could use a larger allocation and 

bring around more change, then maybe that competitive process 

would work in order to bring around—— 

Mr. MCDERMOTT. Sort of a ready kind of process—— 

Mr. DOLE. Exactly, exactly. 

Mr. MCDERMOTT. And you have enough flexibility, once you 

have the bonds, to do what you need to do? 

Mr. DOLE. Yes. What we are finding is that if we can provide 

a reasonable interest rate, the property owner—and we finance 

both commercial and residential property—if at a good interest rate 

they will participate in the program—right now we’re at 7 percent, 

we’re right on the border line. We probably have about a 6 to 7 percent withdrawal ratio right now. We figure if we could bring in, 

like, prime mortgage rates—say 5 to 6 percent—our participation 

could as much as double at that point. 

So, the instrument that you offered is very favorable to local jurisdictions. It just needs to be larger in order to bring around sufficient change. 

Chairman LEVIN. Thank you. 

Mr. MCDERMOTT. Thank you. 

Chairman LEVIN. Mr. Thompson. 

Mr. THOMPSON. Thank you, Mr. Chairman, and thank you to 

all of you who have come to testify today. 

I just want to make one remark on the political issues that Mr. 

Rangel raised. Even folks who don’t get a direct benefit from a program such as the one that’s running in Sonoma County get other 

benefits. There are business owners—Rod just mentioned the commercial guys participate in this. That means that the cost to those 

businesses are kept down so they can keep more employees on, 

they can pass that savings along. In this economy, any time you 

can push that cost curve down, it’s beneficial. 

And Mr. Rangel has wineries up in his area, and I know that the 

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gram, but they have been moving to the renewable energy innovation. I’ve got one winery that went from a $40,000 utility bill a 

month to a $4,000 utility bill a month. 

And right now, when—you know, the wine industry is having a 

real tough time right now, and that makes a difference in who is 

keeping employees on. And it’s a lot like—why some seniors say, 

‘‘I don’t have any kids in school, why should I pay for taxes to go 

to school;’’ I think the whole community benefits from this. 

And, Rod, I want to commend you, you’ve done a great job on the 

program. One area that I would like to hear some more about—and 

I hear it, representing multiple counties, and I hear it from surrounding counties—the advantage Sonoma County is experiencing 

today in the home improvement sector, the jobs that they are creating. I know one county told me, said, ‘‘How do we get in on this,’’ 

because Sonoma County is running away with the jobs in that particular sector. And the building numbers, home building numbers 

I think, are even better in Sonoma because of this program than 

they otherwise would be. Can you comment on that a little bit? 

Mr. DOLE. Thank you, Congressman Thompson. Yes. What we 

have experienced is about a 7.5 percent growth in green building 

jobs during the period since we started this program, neighboring 

counties—unfortunately, in your district—have experienced 2 and 

3 percent declines in those jobs. 

Now, we can’t take all credit for that, for our program, I’m sure 

there is other reasons. But we know that during that period of time 

we put well over $23 million into the economy at that time. 

We have—the other side benefits to this is we actually have the 

building industry changing their business model. We have Pinnacle 

Homes, for example. They do high-end development homes. They 

have changed their business model to now make alterations. They 

have, if you will, educated their people to be more technically capable of evaluating homes, determining what savings could be done 

and then, if you will, creating a plan, an energy plan, for both commercial properties and residential properties. They have taken 

their business and changed that business model. That, for us, is exciting because they are now successful in two fields, not just one 

field. 

We have had a number of companies that have partnered with 

us. One of our biggest partners for marketing this program is the 

installers, contractors, businesses. We have a couple of businesses—Sun, Light, and Power, also Solar Works up in our area— 

they conduct presentations to the community, both the commercial 

and residential, with me and present this program. 

They have become huge advocates—if you will, my marketing 

staff. And they have also become very responsible to the consumers. One of the things that has impressed me is they want to 

make sure their industry doesn’t blow it. This is a great program, 

could be even greater program, but they don’t want to blow it. They 

know the rest of the Nation is watching this program. Seventeen 

other states have passed this legislation. I get calls every day from 

new jurisdiction planning to implement this. There is a blog that 

is sponsored by UC Berkeley to help other jurisdictions startup this 

program. It’s been a cultural change for us, it really has. 


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Mr. THOMPSON. Well, I hope you respond to all those calls, and 

I hope my colleagues represent areas that want to do the same 

thing and emulate this program. And there are just a lot of benefits 

to it. You heard—you named some, but there are others, as well. 

I know I have—up in Hopland, I’ve got a place that trains solar 

installers. So they are training people for jobs, and retraining people who have lost jobs. So I hope to see this spread across the country, and I appreciate all that you have done to make it such a success. 

Mr. DOLE. And thank you for all your support. 

Chairman LEVIN. Thank you. Mr. Thompson was eager that you 

come, and you’ve come a long way. So thank you very, very much. 

Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. And I appreciate Mr. Hundt reminding us of the Michigan connection with you 

and the ranking member. And I am slow off the mark with the 

Michigan suck-up. I should have mentioned my son graduating 

from the business school at Michigan. I will get more into this. 

Chairman LEVIN. And the first—— 

Mr. BLUMENAUER. He’s already done it, but I’m going to claim 

credit for it anyway. 

I must say that this panel was worth waiting for, in terms of reviewing the material and some of the items that are laid out before 

us. 

I appreciate, Ms. Burns, your forthright testimony, sort of your 

oversight, your five-point plan, particularly the government leading 

by example as the largest consumer of energy in the world, that 

things that we can do right now by administrative fiat, procurement process, we can help jump-start so much of this, working with 

the private sector, and saving the government money. 

You’ve got a lot of certified smart people in your company and 

others in the industry, and I would just extend an invitation to you 

to help us think through how we change the Federal Government 

budgeting rules, so it recognizes present value accounting. If we 

can do that, we can break through a number of these barriers. And 

each energy performance contract doesn’t have to be one off negotiated with some colonel in Camp Whatever, and it can be incorporated into GSA, which manages 365 million square feet. 

And so, if we could posit that as a request for assistance—— 

Ms. BURNS. Okay. We will take it on. I hope we can provide 

that assistance. And I think it is very critical, when you think 

about the government leading by example, and it gets to the point 

that you made. I don’t think that there is one or the other. It has 

to be both. It has to be efficiency, it has to be greener buildings and 

the right standards around those and the right procurement practices. And it has to be the right incentives for renewables. 

Mr. BLUMENAUER. We are in agreement. This would help us. 

Ms. BURNS. Great. 

Mr. BLUMENAUER. Mr. Reed [sic], your point about energy 

being generated—electricity being generated and delivered locally I 

thought was interesting. And I love the variation. But I am struck 

by the fact that you are only looking at the cost per kilowatt hour, 

not the burden on households, because—I would invite you to work 

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fornia, they actually, per household, because they employ many of 

these things, they end up paying less. 

And, in fact, I find it striking that some of the—that West Virginia, with the lowest cost in the country, has the highest household cost, if you prorate as a percentage of household income. 

There is something that’s at work here that I think is an argument 

for incentives, and I would invite you to help us strategize that, as 

well. 

Mr. Dole, I love what you’re talking about. One of the areas that 

would be—that we could do this almost overnight with little or no 

Federal legislation would be working with the 51 separate utility 

regulators around the country, and the 5,000 electric, gas, and 

sewer and water utilities that touch 90 percent of the American 

public every month, have access to capital, have the infrastructure, 

and have the relationships with all the contractors that you’re talking about. 

Isn’t it possible to do this through a regulatory process directly 

with utilities? Or do you have to be in the business? 

Mr. DOLE. We could certainly use the help. Thank you for the 

question. We don’t understand why the utilities have not gotten engaged at this point. 

One of the reasons why government needs to run this program 

is it runs through the property tax system. That’s very efficient—— 

Mr. BLUMENAUER. Right, but if you had a regulatory that allowed it to be on the utility bill—— 

Mr. DOLE. Right. 

Mr. BLUMENAUER [continuing].—wouldn’t it accomplish the 

same thing? 

Mr. DOLE. Yes, it would. The—— 

Mr. BLUMENAUER. Time is short. I apologize here, but I wanted to get to Mr. Bolinger, because I’ve got a piece of legislation that 

would, in fact, extend the act’s section 1603. But I think it’s going 

to be very difficult to weave this through the process like it happened last time, which is shared jurisdiction between Ways and 

Means, Appropriations, Commerce. We don’t have anything else 

like this in the Tax Code. 

I would invite your attention to H.R. 4599 that would extend it 

for another 3 years. Do it like—right through the Tax Code directly. It wouldn’t be quite as lucrative, maybe, for some of the attorneys and consultants that would have to wait a little longer. But 

the people who are in the business would be able to do it through 

their annual filing. And our legislation would extend the number 

of partners to real estate investment trust, to publicly owned—public pension funds. 

So, there would be a much bigger audience, simpler to get enacted, more partners. And I would hope that there may be a way 

for you to take a look at H.R. 4599 to see if we’re on the right 

track, and any thoughts you or others of the panel might have to 

keep this valuable program, but actually get it reauthorized and 

get it reauthorized for another 3 years. 

Chairman LEVIN. If you have some thoughts, do give them to 

us. 


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I think we are going to close now with someone who has been 

especially innovative in this whole area. Mr. VAN HOLLEN, you 

have the last crack at it. 

Mr. VAN HOLLEN. Thank you, Mr. Chairman. I want to thank 

all of you for your testimony, as well, and share the view of my colleague, that all of you were well worth waiting for. So thank you 

for your patience. 

I think, Mr. Bohigian, in your testimony you identify some facts 

that underline the challenge that we all face. You have mentioned 

the Department of Energy’s industrial assessment center’s finding, 

that even with a pay-back in less than 1.3 years, 53 percent of 

projects were rejected, and that over the 20-year period, more than 

5,000 end users evaluated that almost 40,000 projects were rejected 

for financing reasons. That’s true in the commercial building sector; 

it’s often true in the residential sector, which is why creative programs like Sonoma County’s and others work, because they find a 

way around that financing problem. 

And you specifically, among your recommendations, identify the 

Department of Energy loan guarantee program, and suggest that 

it should not only apply to new technology, but to proven equipment. And I think that that’s fundamental across the board, because we do have good incentive programs for some of the cutting 

edge technologies, but we continue to have a financing impediment 

with respect to on-the-shelf technologies which, if they were deployed today in a large fashion, would help us dramatically improve energy efficiency and also begin to improve the deployment 

of some renewable energies. But especially in the area of energy efficiency. 

And I stand to thank Mr. Hundt, Reed Hundt, because he has 

worked with us on this idea of trying to create a mechanism to establish some form of low-cost capital loans. Loan guarantees, of 

course, are one form. You can have some other forms of that. 

And if—Mr. Hundt, if you could, just elaborate a little bit on how 

you would see the green bank, the clean energy deployment authority, whatever you want to call it, that we have talked about that 

passed the House in that piece of bipartisan—how that would help 

have more Sonoma Counties, and in fact, help, you know, that differential that Mr. Dole talked about, and maybe talk about Mr. 

Bohigian’s situation. Then I’m interested in your comments on creating that kind of mechanism. So, thank you. 

Mr. HUNDT. So thank you very much, Mr. Van Hollen. The 

green bank would, for example, be able to lower the interest rate, 

the 7 percent that Rod was talking about. It reasonably could be 

down in the neighborhood of 6 percent or 5.5 percent. These percentage differences, everybody in this committee knows, these are 

not trivial. These are the difference between somebody saying, 

‘‘Yes, I’m going to invest,’’ and, ‘‘No, I can’t afford to do it.’’ And so, 

that is an example. 

The PACE programs in the 17 states—I believe we would have 

them in 50 states if we had that Federal support. I don’t mean that 

we should take over their job. Rod told us really clearly that you 

do want somebody on the ground doing the work in the county, 

talking to the people in the county, and having them, as Mr. Rangel said, get with the culture here. 


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But it’s the Federal Government that has the capability to lower 

the overall interest rates by the 1 and 2 percent that make all the 

difference, in terms of businesses, in terms of real estate property 

owners, in terms of whole communities saying, ‘‘This is what we 

want to do,’’ in terms of being more efficient. 

And in the same point, when we turn to generation, if we’re 

going to bring the solar electricity that’s based on the products that 

Dow is inventing, and is a world leader in inventing way back up 

at the research level, if we’re going to translate those into the market, I think over the next 5 years—let’s just talk about the next 

5 years—you can say the following to the people, ‘‘Pay $.15, $.16, 

$.20 a kilowatt hour.’’ No one is going to do it. You’re not going to 

get regulators to say, ‘‘I really want to raise those prices to that 

level,’’ you’re not going to get businesses to say, ‘‘I can build a business around that kind of a price,’’ you’re not going to get consumers 

to say, ‘‘I really can afford to do that.’’ 

Even with efficiency measures, you can’t inflict a 40 and 50 percent price increase on the whole country in a recession, and we are 

looking at 10 million to 15 million people who need to find work 

in order to get us to full employment. But when you provide the 

low-cost financing, when you bring that into the story, you then 

say, ‘‘You don’t need that kind of a price in order to get the investors to invest,’’ because they have affordable, long-term financing. 

And so, they will put their equity into projects. And we have 

been working—with your encouragement, we have been working 

with all the major financial institutions in the United States on 

this project. 

The one thing I am absolutely convinced of after 15 months that 

we have been doing this, Mr. Van Hollen, with you and your office 

and other Members up here, one thing I am convinced of is this. 

The money is there if the economics work. And the low-cost financing will turn a spigot, and we will see, literally, $50 billion, $100 

billion a year invested in the economy in efficiency and generation 

that we’re not seeing right now. Every billion that is spent is 

10,000 new jobs. 

Mr. VAN HOLLEN. Mr. Chairman, I don’t know if there is time 

for the other gentleman just to comment quickly on how this—— 

Chairman LEVIN. Okay, you might want to end on that note 

about all the new jobs. But, please, Mr. Bohigian. 

Mr. BOHIGIAN. I will be brief, and thank you for your patience. 

What we have found, and studies have found over the past several decades, is that for commercial and industrial users, it’s avoiding that capital expenditure that is so key. Regardless of the savings that might be there, whether that’s at 4, 5, 6, or 10 percent, 

people like to not, up front, use capital expenditure budgets on 

HVAC systems and lighting systems. They would rather spend it 

on retaining employees and research and development. 

So, to the—to Congressman Rangel’s point earlier, it’s not just 

about the conservation, it’s about being able to continue to build 

your workforce. And the issue that has been on the structuring 

side, which PACE bonds start to address, is that, in the commercial 

sector especially, people don’t know where they stand on the capital 

structure. They say, ‘‘We’re financing equipment,’’ but that’s behind 


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the tax bill, it’s behind the mortgage. And I can’t tear out an HVAC 

system very easily if I need to, if they’re not paying. 

So what PACE and other mechanisms allow that to do is be 

ahead of the mortgage and solve this financing issue that I think 

could result in billions of dollars in deployment in the very near 

term, and thousands of jobs very soon. Thank you. 

Mr. VAN HOLLEN. Thank you all. 

Chairman LEVIN. Well, thank you very, very much. This has 

been a remarkable third panel in a long and, I think, fruitful day. 

I think, Mr. Camp, you very much agree. 

So, since you have been so productive, as well as patient, we very 

much want to thank each and every one of you. And I think we 

will be seeing more of each other. 

With that, I guess we are now, at 5 after 6:00, adjourned. Thank 

you very much. 

[Whereupon, at 6:05 p.m., the Committee was adjourned.] 

[Submissions for the Record follow:] 


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American Forest & Paper Association, Statement 


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Associated Builders and Contractors Green, Letter 


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BullDog BioDiesel, LLC, Letter 

f 


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270 

Capstone Turbine, Letter 


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271 


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276 

Climate Energy, LLC, Statement 


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277 

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278 

Coal Utilization Research Council, Statement 


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279 


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Continental Resources, Incorporated, Statement 


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284 


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291 

Domtar Corporation, Statement 


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292 

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293 

EC Oregon, Statement 


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294 


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296 

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297 

Edison Electric Institute, Statement 


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298 


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300 

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301 

Electric Drive Transportation Association, Statement 


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302 


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303 

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304 

Encana Natural Gas, Letter 


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305 

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Environmental Working Group, Statement 


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307 


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311 

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312 

Excelsior Energy, Incorporated, Letter 


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313 


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316 

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317 

Flodesign Wind Turbine Corporation, Statement 


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318 

f 


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319 

Friends of the Earth (FOE), Statement 


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320 


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321 


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322 


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323 


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324 


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325 


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327 

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328 

Geothermal Energy Association, Letter 


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329 

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330 

Griffith Ulum, Statement 


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331 


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332 

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333 

Growth Energy, Statement 


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334 


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335 


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337 

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338 

Historic Tax Credit Coalition, Statement 


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339 


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340 


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341 


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342 


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343 

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344 

Honorable Betsy Markey, Statement 

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345 

Honorable Erik Paulsen, Letter 


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346 

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347 

Independent Petroleum Association of America, Statement 


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348 


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349 


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350 


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351 


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352 


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353 


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354 


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355 


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356 


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357 


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358 


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359 


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360 


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361 


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362 

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363 

James Sebesta, Letter 

f 


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364 

Large Public Power Council, Statement 


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365 


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366 


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367 

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368 

Marathon Engine Systems, Statement 


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369 


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371 

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372 

Michael R. Splinter, Statement 


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373 


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374 

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375 

National Commission on Energy Policy, Letter 


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376 


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377 


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378 


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379 


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380 


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381 


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383 

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384 

Nuclear Energy Institute, Statement 


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385 


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386 


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388 

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389 

Natural Resources Defense Council, Letter 


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390 


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391 


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392 

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393 

National Alliance of Forest Owners, Statement 


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394 


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395 


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396 


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398 

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399 

National Association of Home Builders, Statement 


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400 


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401 


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402 


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403 


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404 


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405 

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406 

National Association of Real Estate Investment Trusts, Statement 


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407 


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408 


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410 


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413 


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f 

Statement of Manning Feraci, National Biodiesel Board, 

Vice President of Federal Affairs 

Executive Summary: Biodiesel is a renewable, low carbon diesel replacement 

fuel that is widely accepted in the marketplace. It is the only commercial scale Advanced Biofuel produced in the U.S. The biodiesel tax incentive has allowed the U.S. 

to achieve the significant economic, environmental and energy security benefits associated with expanded domestic production and use of biodiesel. 

Due to volatile commodity prices, unfavorable market conditions, difficulty accessing operating capital, and uncertainty regarding federal policy, the U.S. biodiesel industry is facing severe economic challenges. In particular, the lapse of the biodiesel 

tax incentive on December 31, 2009 has had a detrimental impact on the industry, 

and the domestic production and consumption of biodiesel has been significantly 

curtailed. Plants nationwide have already ceased production, trimmed payrolls and 

laid off employees, and the 23,000 jobs nationwide supported by the industry will 

be in increasing jeopardy the longer the tax incentive is allowed to lapse. AccordVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00419 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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ingly, the U.S. biodiesel industry asks Congress to address this immediate issue and 

act in a timely manner to retroactively extend the biodiesel tax incentive. 

In addition, it is difficult for entrepreneurs and investors to make long-term business decisions based on year to year extensions of the biodiesel tax incentive. Thus, 

a multiple year extension of the incentive is needed to provide certainty and stability in the marketplace. In addition, the U.S. biodiesel industry supports reforming 

the biodiesel tax incentive by changing the current blenders excise tax credit to a 

production excise tax credit. This will improve Administration of the incentive, 

eliminate potential abuses and enhance tax compliance. 

Chairman Levin, Ranking Member Camp and Members of the Committee, I thank 

you for the opportunity to submit written testimony on behalf of the National Biodiesel Board (NBB) regarding the need to retroactively extend and reform the biodiesel tax incentive. 

About NBB: NBB is the national trade association representing the biodiesel industry as the coordinating body for research and development in the U.S. It was 

founded in 1992 by state soybean commodity groups who were funding biodiesel research and development programs. Since that time, the NBB has developed into a 

comprehensive industry association, which coordinates and interacts with a broad 

range of cooperators including industry, government and academia. NBB’s membership is comprised of biodiesel producers; state, national and international feedstock 

and feedstock processor organizations; fuel marketers and distributors; and technology providers. 

Background and Industry Overview: Biodiesel is a diesel replacement fuel 

that is an Advanced Biofuel under the Renewable Fuels Standard (RFS2) program. 

The fuel is made from agricultural oils, fats and waste greases and is refined to 

meet a specific commercial fuel definition and specification. The fuel is produced by 

reacting feedstock with an alcohol to remove the glycerin and meet the D6751 fuel 

specification set forth by the American Society for Testing and Materials (ASTM 

International). Biodiesel is one of the best-tested alternative fuels in the country 

and the only alternative fuel to meet all of the testing requirements of the 1990 

amendments to the Clean Air Act. There are currently 173 biodiesel plants in the 

U.S. with a combined production capacity of 2.69 billion gallons. 

Biodiesel is primarily marketed as a 5 percent (B5) blending component with conventional diesel fuel, but can be used in concentrations up to 20 percent (B20). It 

is distributed utilizing the existing fuel distribution infrastructure with blending occurring both at fuel terminals and ‘‘below the rack’’ by fuel jobbers. Biodiesel is beginning to be distributed through the petroleum terminal system. To date, biodiesel 

is available in over 72 fuel distribution terminals. Last year, two major pipeline 

companies successfully tested B5 blends in pipelines, and the biodiesel industry has 

committed funds to continue to study the technical needs required for moving biodiesel through U.S. pipelines. Already, biodiesel is moved through pipelines in Europe, and expanding that capability in the U.S. would significantly increase biodiesel penetration in the U.S. diesel fuel market. 

Status and Background on the Biodiesel Tax Incentive: The biodiesel tax 

incentive was enacted in 2004 as part of the American Jobs Creation Act (P.L. 108– 

357). The incentive was subsequently extended through December 31, 2008 as part 

of the Energy Policy Act of 2005 (P.L. 109–190). H.R. 1424, the Emergency Economic Stabilization Act of 2008 (P.L. 110–343), again extended the incentive for 1 

year through December 31, 2009. The biodiesel tax incentive has expired, and the 

current lapse in the biodiesel tax incentive has had a detrimental impact on the domestic biodiesel industry. 

On December 9, 2009, the U.S. House of Representatives approved H.R. 4213, The 

Tax Extenders Act of 2009, by a 241–181 margin. This legislation, among its provisions, provides a 1-year extension of the biodiesel tax incentive. The U.S. Senate 

voted to approve its version of H.R. 4213, The American Workers, State, and Business Relief Act of 2010, on March 10, 2010 by a 62–36 margin. H.R. 4213 as approved by the U.S. Senate provides a 1-year retroactive extension of the biodiesel 

tax incentive. 

The biodiesel tax incentive is designed to encourage the production and use of biodiesel by making the fuel’s price competitive with conventional diesel fuel. In general, current law allows taxpayers to claim the biodiesel tax incentive as either a 

$1.00 per gallon general business income tax credit or as a $1.00 per gallon blenders 

excise tax credit. To qualify for the biodiesel tax incentive, the fuel must by statute 

meet both the ASTM D6751 fuel specification and the Environmental Protection 

Agency’s (EPA) registration requirements under Section 211 of the Clean Air Act. 


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The income tax credit can be claimed either as a biodiesel mixture credit, which provides the incentive for each gallon of biodiesel that is blended with conventional diesel fuel, or as a B100 biodiesel credit for each gallon of pure biodiesel that is used 

as a fuel. 

The biodiesel tax incentive also provides a biodiesel blenders excise tax credit. The 

credit is $1.00 for each gallon of biodiesel that is blended with conventional diesel 

fuel. The blenders excise tax credit differs from the biodiesel mixture income tax 

credit and the B100 biodiesel income tax credit in that the blenders credit can be 

used to offset excise tax liability, and is refundable to the degree that the credit exceeds excise tax owed by a taxpayer. The B100 biodiesel credit and biodiesel mixture 

income tax credit are coordinated to take into account amounts claimed via the 

blenders credit. The vast majority of biodiesel tax incentives are claimed as a blenders excise tax credit. 

Lastly, current law provides for a small agri-biodiesel producer income tax credit. 

The credit is 10 cents per gallon and can be claimed by taxpayers with less than 

60 million gallons of cumulative annual production capacity. The credit is limited 

to the first 15 million gallons of annual production. To qualify for the small producer 

credit, fuel must be produced from either virgin vegetable oils or animal fats. 

Biodiesel Public Policy Benefits: The biodiesel tax incentive has helped 

achieve the worthwhile policy goal of increasing the production and use of biodiesel 

in the U.S. In 2004, when the incentive was initially enacted, the U.S. produced 25 

million gallons. In 2009, that number rose to 545 million gallons. There are compelling public policy benefits associated with the enhanced production and use of biodiesel in the U.S. 

The Biodiesel Industry is Creating Green Jobs and Making a Positive Contribution 

to the Economy: In 2009, the U.S. biodiesel industry supported 23,000 jobs in all sectors of the economy. This added $4.1 billion to the Nation’s Gross Domestic Product 

(GDP) and generated $828 million in tax revenue for federal, state and local governments. 

By conservative estimates, there is domestic feedstock available to support 1.77 

billion gallons of annual biodiesel production in the U.S. The domestic industry has 

the capacity to support this level of production. The production of 1.77 billion gallons of fuel would support 78,619 jobs; add $6.660 billion to the GDP; generate 

$1.345 billion in revenue for federal, state and local governments; and reduce greenhouse gas emissions by 27.4 billion pounds—the equivalent of removing 2.38 million 

passenger vehicles from U.S. roads. 

Biodiesel Reduces our Dependence on Foreign Oil: Biodiesel plays a constructive 

role in expanding domestic refining capacity and reducing our reliance on foreign 

oil. The 1.9 billion gallons of biodiesel produced in the U.S. since 2005 has displaced 

an equivalent amount of diesel fuel with a clean-burning, efficient fuel that reduces 

lifecycle carbon dioxide emissions by as much as 86 percent compared to petroleum 

diesel fuel and creates 4.56 units of energy for every unit of energy that is required 

to produce the fuel. 

Biodiesel is Good for the Environment: Biodiesel is an environmentally safe Advanced Biofuel, and is the most viable transportation fuel when measuring its carbon footprint, life cycle and energy balance. The U.S. Department of Agriculture 

(USDA)/Department of Energy (DoE) life cycle study shows that biodiesel yields a 

78 percent reduction in direct lifecycle CO 2 emissions compared to petroleum diesel 

fuel. The EPA’s RFS2 life cycle analysis shows that biodiesel reduces greenhouse 

gas emissions by as much as 86 percent. One billion gallons of biodiesel will reduce 

current life cycle greenhouse gas emissions by 16.12 billion pounds, the equivalent 

of removing 1.4 million passenger vehicles from U.S. roads. In 2009 alone, biodiesel’s contribution to reducing greenhouse gas emissions was equal to removing over 

774,000 passenger vehicles from America’s roadways. 

Biodiesel’s emissions significantly outperform petroleum diesel. Biodiesel emissions have decreased levels of all target polycyclic aromatic hydrocarbons (PAH) and 

nitrited PAH compounds, as compared to petroleum diesel exhaust. These compounds have been identified as potential cancer causing agents. 

Biodiesel is the only alternative fuel to voluntarily perform Environmental Protection Agency (EPA) Tier I and Tier II testing to quantify emission characteristics and 

health effects. That study found that B20 (20 percent biodiesel blended with 80 percent conventional diesel fuel) provided significant reductions in total hydrocarbons, 

carbon monoxide, and total particulate matter. Research also documents the fact 

that the ozone forming potential of the hydrocarbon emissions of pure biodiesel is 

nearly 50 percent less than that of petroleum fuel. Pure biodiesel typically does not 

contain sulfur and therefore reduces sulfur dioxide exhaust from diesel engines to 

virtually zero. 


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The Biodiesel Industry Stimulates Development of New Low-Carbon Feedstocks: 

The feedstock used to produce U.S. biodiesel has increasingly diversified, with waste 

products such as animal fat and used restaurant grease (yellow grease) making up 

a larger portion of the feedstock used to produce fuel. Biodiesel production is currently the most efficient way to convert lipids into low-carbon diesel replacement 

fuel, and as a result, industry demand for less expensive, reliable sources of fats 

and oils is stimulating promising public, private and non-profit sector research on 

second generation feedstocks such as algae. 

Algae’s potential as a source of low carbon fuel has been well documented, and 

a stable, growing biodiesel industry is necessary if the U.S. is to eventually benefit 

from the commercial scale production of algal-based biofuels. The NBB estimates 

that for every 100 million gallons of biodiesel that is produced from algae, 16,455 

jobs will be created and $1.461 billion will be added to the GDP. 

U.S. Biodiesel Industry is Facing Severe Economic Hardship: Despite recent growth, the industry is in the midst of an economic crisis. Plants are having 

difficulty accessing operating capital. Volatility in commodity markets and reduced 

demand for biodiesel in both domestic and global markets are making it difficult for 

producers to sell fuel. Lastly, uncertainty relating to federal policy that is vital to 

the industry’s survival—in particular the current lapse of the biodiesel tax incentive—is sending inconsistent signals to the marketplace and undermining investor 

confidence in the industry. 

If prolonged, this downturn will lead to a severe retraction in U.S. biodiesel production capacity. Because of the lapse in the biodiesel tax incentive, the price of biodiesel is significantly higher than petroleum diesel. This has made it nearly impossible for biodiesel plants to produce fuel at a profit, and as a result, U.S. production 

and consumption of biodiesel has been severely curtailed. If this situation is allowed 

to persist, the energy security, environmental, and job creation benefits that the Nation realizes from biodiesel production will be lost. 

Multiple Year Extension of a Reformed Biodiesel Tax Incentive is Consistent with Sound Tax and Energy Policy: The biodiesel tax incentive has 

helped the nascent U.S. biodiesel industry reach commercial scale production of renewable, low carbon diesel replacement fuel. This in turn has allowed the Nation 

to realize the energy security, economic and environmental benefits associated with 

the domestic production and use of biodiesel. It is, however, difficult for entrepreneurs and investors to make long-term business decisions based on year to year 

extensions of the biodiesel incentive. Thus, a multiple year extension of the biodiesel 

tax incentive is needed to provide certainty and stability in the marketplace. 

NBB also supports a structural reform of the tax incentive. Specifically, the U.S. 

biodiesel industry supports changing the current blenders excise tax credit to a production excise tax credit of equal value. This change will streamline Administration 

of the credit and promote tax compliance while preserving the elements of the existing incentive that have effectively incentivized the production and use of biodiesel. 

This reform proposal is encompassed in H.R. 4070, legislation introduced by U.S. 

Representative Earl Pomeroy (D–ND) and U.S. Representative John Shimkus (R– 

IL) and S. 1589, The Biodiesel Reform and Extension Act of 2009, introduced in the 

U.S. Senate by Senator Maria Cantwell (D–WA) and Senator Charles Grassley (R– 

IA). 

There are several shortcomings associated with the current structure of the biodiesel blenders excise tax credit that would be remedied by restructuring the incentive as a production excise tax credit. Specifically: 

Current Blenders Excise Tax Credit Structure Presents Administrative Difficulties: 

Blending biodiesel with diesel fuel, the event that triggers the blenders credit, can 

occur at multiple stages in the fuel distribution chain. This significantly increases 

the number of registrants eligible to claim the credit and makes it difficult to ensure 

that only fuel that qualifies for the benefit claims the incentive. Changing the blenders excise tax credit to a production excise tax credit would allow the incentive to 

be claimed at either a biodiesel plant or at an Internal Revenue Service (IRS) registered terminal, making it easier to ensure that only fuel meeting the ASTM D6751 

fuel specification receives the tax incentive while preserving the incentive’s underlying economic benefits. 

Existing Blenders Excise Tax Credit Does Not Work Well with the U.S. Department 

of Treasury’s Excluded Liquids Rule: Under existing regulations, for purposes of the 

24.3 cents per gallon diesel fuel excise tax, diesel fuel does not include ‘‘excluded 

liquids.’’ Among other things, liquids with less than 4 percent paraffin content are 

considered an excluded liquid. Existing IRS regulations allow B99.9 biodiesel blends 

and other blends to qualify for the biodiesel blenders excise tax credit, even if the 

blend is an excluded liquid not subject to the federal diesel fuel excise tax. B99.9 

blends do not have 4 percent paraffin content, and thus, are not currently subject 


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to the diesel fuel excise tax. Because biodiesel is typically used as a lower level 

blend component in the marketplace that is eventually subject to the federal diesel 

fuel excise tax, this leads to a situation where excise tax liability is triggered at 

varying points ‘‘below the rack.’’ This makes collection of the 24.3 cents per gallon 

diesel fuel excise tax burdensome for both taxpayers and the IRS. 

In an attempt to address this issue, the IRS issued a proposed rule on July 29, 

2008 that would modify the Excluded Liquids rule in a manner that would subject 

B99.9 biodiesel blends to the federal diesel fuel excise tax. This change, however, 

would further complicate the taxation and distribution of biodiesel in fuel terminals. 

For example, under the proposed rule, a B99.9 blend sold by a biodiesel producer 

to a position holder in an IRS registered terminal would be subject to the 24.3 cents 

per gallon diesel fuel excise tax. When the B99.9 fuel is further blended to a B5 

through B20 level and is sold at the terminal in a taxable sale, the biodiesel component of the blend would again be subject to the diesel fuel excise tax. Though there 

is an existing regime that would allow for the refunds, this system is not timely and 

is difficult for taxpayers to navigate. As a result, this change would again have the 

unintended consequence of artificially inflating the price of biodiesel in the marketplace on account of the fuel being subject to double taxation and could cause cash 

flow issues for fuel marketers and terminal operators who sell and promote biodiesel 

in the marketplace. Further, terminal operators who handle both B100 and B99.9 

biodiesel blends would be forced to expend capital to purchase additional storage 

tanks and other infrastructure to handle biodiesel, again serving as a deterrent to 

the expanded use and sale of biodiesel through the Nation’s fuel terminals. 

The IRS is also in the midst of a process that would incorporate biofuels, including biodiesel, in the existing ExStars fuel reporting system. ExStars is a fuel excise 

tax compliance reporting system that tracks the flow of fuel through IRS registered 

terminals. In an effort to collect the 24.3 cents per gallon diesel fuel excise tax owed 

on biodiesel blends ‘‘below the rack,’’ the IRS envisions significantly expanding the 

number of taxpayers that must file reports under the ExStars system to include 

small ‘‘below the rack’’ fuel marketers. This would impose an onerous regulatory 

burden on small businesses. 

To remedy this issue, H.R. 4070 and S. 1589 would treat pure biodiesel as diesel 

fuel for tax purposes. In general, the reform proposal would provide that the biodiesel tax incentive would be claimed and the diesel fuel excise tax would be paid 

when biodiesel was sold by the plant. The proposal would also allow for the sale 

of tax-exempt, non-credit claimed fuel to an IRS registered terminal, and the credit 

would be claimed and excise tax paid at the terminal. This structure would avoid 

the complexities associated with subjecting B99.9 blends to the diesel fuel excise tax 

under the current structure of the biodiesel tax incentive. In addition, this would 

significantly improve tax compliance and remove the need for the IRS to impose onerous below the rack ExStars reporting requirements on fuel distributors and marketers. 

Change to Production Excise Tax Credit Would Stop Potential Transshipment 

Schemes: P.L. 110–343 contained a provision designed to give the IRS the statutory 

authority to stop so-called ‘‘splash and dash’’ transactions. A ‘‘splash and dash’’ 

transaction occurs when biodiesel produced in a foreign country is sent to the U.S., 

splash blended with diesel fuel to claim the U.S. biodiesel blenders excise tax credit, 

and then sent to a third country for final use as biodiesel or diesel fuel at any blend 

level. P.L. 110–343 clarified that effective May 15, 2008, fuel produced outside the 

U.S. for use outside the U.S. does not qualify for the biodiesel tax incentive. There 

is clearly no energy or tax policy justification for this sort of transaction, and the 

NBB was fully supportive of efforts to close this unjustified and unforeseen tax loophole. 

Though Congress closed the ‘‘splash and dash’’ loophole, the current law blenders 

credit could inadvertently allow for other potential abuses associated with the transshipment of foreign fuel through the U.S. to claim the blenders credit. In addition, 

further refinements to the blenders excise credit to address these issues are likely 

to run contrary to U.S. WTO commitments. A change to a production excise tax 

credit would thwart any potential transshipment abuses in a WTO-consistent manner. 

Transition to Production Excise Tax Credit Could be Accomplished with Minimal 

Marketplace Disruption: Under current law, a blend of 99.9 percent biodiesel and 

.1 percent diesel qualifies for the biodiesel blenders excise tax credit. Biodiesel 

plants are currently permitted to claim the incentive. Thus, for practical purposes, 

the current incentive in these instances functions as a production credit. A change 

to a production excise tax credit would preserve the incentive’s liquidity and could 

be easily administered by both taxpayers and the IRS. 


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1 NHA is a non-profit national association dedicated exclusively to advancing the interests of 

the U.S. hydropower industry, including conventional, pumped storage and new ocean and other 

hydrokinetic technologies. NHA’s membership consists of more than 170 organizations including 

public utilities, investor owned utilities, independent power producers, project developers, equipment manufacturers, environmental and engineering consultants and attorneys. 

Conclusion: The biodiesel tax incentive has helped achieve the desired goal of 

increasing the domestic production and use of biodiesel, and in turn has helped the 

U.S. realize the energy security, economic and environmental benefits associated 

with displacing petroleum with domestically produced renewable fuels. These benefits, however, will be lost if Congress does not act in a timely manner to address 

the immediate issue facing the industry and retroactively extend the biodiesel tax 

incentive. In addition, to provide certainty and improve the incentive, the U.S. biodiesel industry urges Congress to reform the biodiesel tax incentive as a production 

excise tax incentive and provide a multiple year extension of the reformed incentive. 

Chairman Levin, Ranking Member Camp and Members of the Committee, I again 

appreciate having the opportunity to submit written testimony on this issue of significant importance to the U.S. biodiesel industry. 

f 

National Hydropower Association, Letter 

April 16, 2010 

The Honorable Sander Levin The Honorable David Camp 

Chairman Ranking Minority Member 

Committee on Ways and Means Committee on Ways and Means 

1102 Longworth House Office Building 1139E Longworth House Office Building 

Washington, DC 20515 Washington, DC 20515 

Dear Chairman Levin and Ranking Member Camp: 

The National Hydropower Association 1 (NHA) appreciates this opportunity to 

comment on the need for continued federal investment in the Nation’s hydropower 

system to support the ambitious renewable energy goals set by Congress, the Administration, as well as the states. 

Significantly increased renewable energy generation has many short- and longterm benefits, such as reduced emission of greenhouse gases and other pollutants. 

However, to meet these aggressive goals and reap the benefits, aggressive federal 

policy support, particularly in the form of expanded tax incentives, is needed. 

NHA believes the U.S. hydropower industry is primed for responsible growth and 

can play a significant role in the effort to increase renewable energy generation. Numerous opportunities are available to expand this country’s hydropower base while 

at the same time providing responsible environmental stewardship of the Nation’s 

rivers. 

These opportunities have grown dramatically with Congress’ enactment of the Energy Policy Act of 2005 (EPAct 2005), and more recently, the American Recovery 

and Reinvestment Act of 2009 (ARRA). However, policies remain unfinished or not 

addressed by these statutes that would provide the long-term certainty needed by 

utilities and project developers to attract investment in the hydropower sector and 

to finance new development. 

NHA commends to the Committee the following items for inclusion in any tax 

package as part of a jobs stimulus or energy and climate bill: 

• Section 45 Production Tax Credit Parity for Hydropower and 

Hydrokinetic Resources Internal Revenue Code (IRC) Section 45 provides 

for a production tax credit (PTC) for electricity produced from certain renewable resources. Under current law, the PTC discriminates between technologies, picking winners and losers. Certain facilities, such as wind and geothermal power, are eligible to receive the full PTC, while other qualified facilities, including qualified hydropower, small irrigation power and marine 

and hydrokinetic power receive only 50 percent of the full PTC rate. 

All of the technologies that qualify for the PTC play an important role in expanding the Nation’s use of renewable electricity and reducing the effects of 

climate change. The disparity in the PTC distorts market dynamics and 

makes it difficult for facilities that receive only a 50 percent credit to compete 

with those that receive the full amount of the credit. It is critical for Congress 

to provide technology-neutral tax incentives to promote the growth of all 


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clean electricity resources. (See introduced bipartisan parity legislation—H.R. 

2626, the Renewable Energy Parity Act.) 

In ARRA, Congress recognized the need for equal tax treatment for renewables by allowing all renewable energy project developers to elect the 30 percent ITC. NHA recommends Congress extend the same treatment to the PTC, 

which would harmonize the policies and ensure there is no slanting of investment in favor of any one technology over another. 

• Extension of Section 1603 Grants Section 1603 of ARRA created a Department of Treasury grant program that provides for a 30 percent cash grant in 

lieu of the IRC section 48 ITC for specified energy property (a) placed in service in 2009 or 2010 (regardless of when construction began), or (b) placed in 

service after 2010 but before January 1, 2017, but only if the construction of 

such property began during 2009 or 2010. 

Although the grant program has been very helpful in providing access to financing for qualified energy facilities during the Nation’s economic downturn, 

a 2-year extension of the grant program would ensure the creation of additional facilities to expand production of renewable energy and create thousands of new green technology jobs. NHA also recommends adoption of a 

mechanism that allows public power to utilize the Section 1603 program. 

• Increase Funding of CREBs. Clean Renewable Energy Bonds (CREBs) are 

tax credit bonds that provide the equivalent of interest-free loans to provide 

financing for capital expenditures for qualified public power projects. Additional funding of the CREBs program is critical to ensuring that qualified 

projects have access to capital to construct new facilities. 

• Expansion/Extension of the IRC Section 48C Advanced Manufacturing 

Credit. ARRA created a new IRC Section 48C 30 percent ITC for qualified 

investment in projects that re-equip, expand or build manufacturing facilities 

used to produce certain specified advanced energy property. ARRA provided 

for $2.3 billion in credits to be awarded through a competitive application 

process. President Obama has proposed increasing funding for the program 

to $5 billion in order to expand the Nation’s green energy manufacturing capacity and create high-paying new green technology jobs in the U.S. 

• Pumped Storage Investment Tax Credit and CREBs Eligibility. Pumped 

storage of electricity is a proven, viable, large-scale method of storing energy 

and is an ideal option for firming the variability of other renewable energy 

resources, such as wind and solar. Pumped storage provides several grid reliability benefits, including energy storage, load balancing, frequency control, 

and incremental and decremental reserves. There are approximately three 

dozen new projects under consideration—almost entirely in the western half 

of the country. These proposed facilities are situated in key areas where new 

development of variable resources is occurring at a rate that will challenge 

the capabilities of the transmission system and existing flexible generation resources to manage. 

Pumped storage is also the largest-capacity form of grid energy storage currently available. Projects generally range in size from 500–1500 MWs, an important factor considering the tremendous increase in variable renewable 

generation, particularly wind, which is growing at a rate of thousands of 

MWs per year. 

Legislation has been introduced that would provide a 20 percent investment 

tax credit and CREBs eligibility for energy storage property, including 

pumped storage. Enactment of this bipartisan legislation, H.R. 4210, the 

Storage Technology of Renewable and Green Energy Act, would help to significantly expand the Nation’s capacity to provide the reliability and grid stability benefits pumped storage provides. 

• Long-Term Extension of PTC and ITC. With ARRA, the Congress extended the production and incentive tax credits through 2013. This multi-year 

extension has been critical for the hydropower industry to utilize the credits 

as the development and deployment timeline of larger, more capital-intensive 

hydropower projects is longer than that of other renewables. To date, over 4 

dozen projects have been certified for PTCs and several other projects are 

looking to utilize the ITC or were resurrected after being put on the shelf because of the ITC availability. 


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All of these projects though, involve adding new capacity at existing hydropower facilities. Also eligible under the PTC and ITC are new hydropower facilities at existing non-powered dams. Currently, only 3 percent of the country’s 80,000 dams have power facilities. However, these projects are required 

to complete a licensing process that takes 5 to 5.5 years, on average, with 

additional time needed for construction and equipment manufacturing. A further extension of the credits for hydropower facilities is needed to ensure that 

these larger projects with longer lead times have the certainty of the incentives. Otherwise, investment will continue to flow, by default, to those technologies that can deploy in less time. 

NHA appreciates the opportunity to submit this statement for the record. We believe there are tremendous opportunities to accelerate deployment of hydropower resources to realize our national clean energy, jobs, and environmental goals by utilizing the benefits hydropower provides. However, policy matters, and we strongly 

encourage the Committee to adopt the recommendations outlined above. 

Sincerely, 

Linda Church Ciocci 

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Executive Director 


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National Roofing Contractors Association, Statement 


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National Rural Electric Cooperative Association, Statement 


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f 

Nature’s Fuel, Letter 

April 27, 2010 

Ways and Means Committee 

U.S. House of Representatives 

Washington, DC 20515 

Honorable Members of the Ways and Means Committee: 

My name is Glenn Johnson. I am the Chief Operating Officer and President of 

Nature’s Fuel located in Fort Wayne, Indiana. I am writing in response to the 

House Ways and Means Committee hearing entitled, ‘‘Tax Incentives Driving the 

Green Job Economy,’’ to offer my perspective on current Federal tax incentives and 

express my concern over certain inequities related to recently-expired renewable 

fuel incentives. 

Nature’s Fuel currently has a plant operating in Atwood, IN that produces biooil and bio-char made from pyrolyzed wood waste from the recreational vehicle inVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00438 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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dustry. We have just permitted a plant at the landfill in Huntington, IN that will 

process and pyrolyze municipal solid waste, tires, wood and construction and demolition waste and other non-hazardous wastes to make low-sulfur renewable oil, biochar, and eventually an ultra-low sulfur renewable diesel. At this facility, 100 percent of its intake will be made into renewable energy, renewable building products 

or recycled and sold to remake into other commercial products using an environmentally-friendly process. Nature’s Fuel bio-oil can be used as a clean feedstock for 

biodiesel, as clean heating oil or as renewable diesel using the Fischer-Tropsch process. 

While incentives are a powerful tool in shaping our country’s energy future, they 

can also skew private sector outcomes. It is my understanding that the House Ways 

& Means Committee has serious concerns with the Alternative Fuel Tax Credit 

(AFTC) because coal-to-liquid fuels would be incentivized by the $.50 per gallon 

AFTC. My company simply has a different feedstock and business plan. Before the 

expiration of the AFTC in 2009, Nature’s Fuel was eligible to receive a $.50 per gallon credit for the bio-oil produced from discarded wood waste. Please be assured that 

the AFTC was critical to our investment in our first and second plants. 

Nature’s Fuel is advancing its technical capability to produce Renewable Diesel 

and/or Biodiesel. Therefore, my company strongly supports the conversion of the 

blender tax credits to producer tax credits. Production is simply a harder part of 

the business and requires a much higher degree of capital investment. Finally, it 

is much closer aligned with the public policy goal of incentivizing more domestically 

produced transportation fuels to displace our foreign oil imports from the Middle 

East. 

Moving to a producer tax credit will directly result in new construction that will 

help create jobs in our country and helps to further develop the renewable and biodiesel industries. Finally, this proposed change in federal law will also help eliminate ‘‘splash and dash’’ activity. 

Thank you for your consideration of this timely and crucial matter. Please do not 

hesitate to contact me if you have any questions. 

Sincerely, 

Glenn W Johnson 

f 

COO-President, Nature’s Fuel 

Northeast Combined Heat and Power Initiative, Letter 

April 27, 2010 

The Honorable Sander Levin The Honorable David Camp 

Ways and Means Committee Ways and Means Committee 

1102 Longworth House Office Building 1139E Longworth House Office Building 

Washington, DC 20525 Washington, DC 20515 

Dear Chairman Levin and Ranking Member Camp: 

On behalf of the members of the Northeast Combined Heat and Power Initiative, we are writing to urge your consideration of an important bill to support residential combined heat and power in the United States. 

The Northeast Combined Heat and Power Initiative (NECHPI) is a volunteer organization dedicated to accelerating the deployment of clean, efficient 

combined heat and power in the Northeastern United States. NECHPI leads the 

Northeast Region in encouraging the implementation of CHP technologies and 

drives CHP roadmap action items in support of the U.S. Department of Energy’s (DOE) programs. NECHPI is an alliance which includes the DOE, the 

North East Clean Energy Application Center, The U.S. Environmental Protection Agency CHP Partnership, CHP developers and equipment manufacturers, 

State and local governmental organizations and others involved with energy 

and the environment. NECHPI provides for coordination and communications 

among the various stakeholders in the region, including but not limited to federal agencies, state agencies, utilities, project developers, equipment manufacturers, CHP users, universities, research institutions, and public interest 

groups. 

Congress has an opportunity to make American homes more energy efficient, save 

homeowners thousands of dollars on rising energy bills, reduce emissions associated 

with the residential sector, and create jobs by creating incentives to promote the inVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00439 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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stallation of residential CHP systems. The residential sector represents 22 percent 

of energy usage in the United States, and now homeowners can reduce energy usage 

by installing cogeneration systems that have been developed for the home. Microcombined heat and power (micro-CHP) technologies, which are increasingly used in 

Europe and Japan, can greatly improve energy efficiency in a majority of U.S. 

homes while creating thousands of new green energy jobs across America. 

Based upon EIA 2010 Annual Energy Outlook data, if one-half of the electricity 

delivered for residential consumption could be replaced by electricity produced onsite by micro-CHP, total U.S. energy consumption can be reduced by approximately 

5 percent or five quadrillion Btus due to electricity related losses that are avoided. 

This represents both an enormous efficiency opportunity and cost savings. 

We ask you to support a bill that will enhance America’s residential energy efficiency and help establish further micro-CHP manufacturing in the U.S. Micro-CHP, 

which recaptures heat created in the electrical generation process and uses it to 

heat the home, currently, receives no tax benefits. We urge Congress to pass Rep. 

Higgins’ bi-partisan H.R. 2328 which would establish a 30-percent tax credit for the 

installation of highly efficient micro-CHP systems in homes in the U.S. 

In today’s economy, having the opportunity for homeowners to save on their utility bills while utilizing less energy and producing fewer emissions is part of a bold 

and necessary energy action plan. Micro-CHP systems will strengthen our electric 

utility infrastructure through increasing the amount of distributed generation, and 

will promote energy independence by utilizing our domestic sourced natural gas. 

• A tax credit for homeowners who install residential CHP systems would encourage energy efficiency and create investments by utilities, financing authorities, heating and cooling manufacturers, and many other residential 

home industries. 

• The tax credit would result in the immediate and long-term creation of thousands of jobs across many industries, including the manufacturing, sales, installation, maintenance, and service of micro-CHP systems in the U.S. 

• The tax credit would encourage owners of the 3–4 million central heating systems installed each year in the U.S. to consider adding cogeneration to their 

homes, vastly decreasing fuel use and harmful air pollutants. 

Thank you for your consideration of this tax credit that will create jobs, encourage 

homeowners to save money, reduce fuel use and emissions, and help to establish a 

micro-CHP industry in the United States. 

Sincerely, 

John Rathbun Thomas Kelly 

Chairperson Vice Chairperson 

Northeast CHP Initiative Northeast CHP Initiative 

Submitted by: 

John Rathbun 

Chairperson 

Northeast CHP Initiative 

John.rathbun@us.ngrid.com 

516–545–3863 office 

516–659–6431 cell 

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Northwest Pipe Company for Northwest PowerPipe, Letter 


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Orion Advocates on behalf of Domtar Corporation, Statement 


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Paper Industry Coalition to Save Energy 

and Main Street Jobs, Statement 

Submitted by: The Paper Industry Coalition to 

Save Energy and Main Street Jobs 

Appleton Papers Old Town Fuel & Fiber 

Boise Incorporated Port Townsend Paper Corp. 

Buckeye Technologies Sappi Fine Paper North America 

Domtar Stratex Energy 

Finch Paper LLC Thilmany Papers 

Glatfelter Verso Paper Corp. 

Lincoln Paper & Tissue LLC 


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The use of renewable energy resources to reduce reliance on foreign fossil fuel 

sources and secure American jobs is a laudable and worthwhile goal, and one that 

our forest products industry coalition wholeheartedly encourages. 

Forest products firms—in particular pulp and papermaking companies—have 

been leaders in the use of renewable, green energy for decades. We use every part 

of the tree. What is not made into paper is recycled into a major source of clean, 

renewable, and essentially carbon-neutral energy used to help power the mills. As 

a result, U.S. pulp and paper mills are, on average, 65% energy self-sufficient. The 

environmental benefits of this commitment are significant. We’ve eliminated the 

need for approximately 6.5 billion gallons of fossil fuels annually that would otherwise have been burned to power the mills. Waste streams have been reduced and 

air quality improved. 

Customers have had continued access to environmentally friendly, sustainable 

products because U.S. mills have continued to produce products from responsibly 

harvested trees grown in well-managed forests. The alternative is buying lower-cost 

pulp imported from countries with less stringent forestry restrictions and practices, 

such as Indonesia, Brazil and China, involving the harvesting of rainforests and requiring millions of gallons of fossil fuel to be burned to ship the products to the U.S. 

To expand production of green energy in the United States, protect valuable 

American manufacturing jobs in rural communities, and encourage investment in 

environmental protection and efficient manufacturing, the Paper Industry Coalition 

to Save Energy and Main Street Jobs—in partnership with the United Steelworkers—strongly supports the Green Energy Paper Manufacturing Act of 2009 

(H.R. 4389) sponsored by Representatives Scott Murphy, Michael Michaud, Steve 

Kagen and David Roe. The bill would provide a tax credit to help level the playing 

field among producers of wood-based bioenergy, and require reinvestment in domestic mills to help protect American manufacturing jobs. 

The paper industry leads the world in the production and use of renewable energy, and H.R. 4389 would allow paper companies to continue to invest in green energy processes—advancing improved environmental efficiencies in paper manufacturing and renewable fuels use. 

As Congress looks to further encourage the use of renewable energy resources, it 

must be mindful of the impact of government incentives that choose winners and 

losers in the use of renewable energy. While the government can play an important 

role in helping to promote the use of green technologies, to incentivize one industry 

at the expense of another undercuts the goal of job stability and creation. 

Technology-neutral incentives, such as H.R. 4389, provide an equitable benefit to 

users of biomass-based renewable energy, while retaining and expanding manufacturing jobs that are critical to meet the dual goals of reducing dependence on foreign 

energy and improving the stability of domestic manufacturing. 

Current incentive programs treat the same tree in vastly different ways, depending on who is using this renewable resource. Significant tax advantages are provided to certain producers that burn the wood only as a biofuel. Companies that 

make value-added products, like paper, from the same kind of fiber—and use the 

waste fiber to fuel a large part of the manufacturing process—are not eligible for 

these tax incentives. In addition, those incentives are raising the cost of raw materials for pulp and papermakers. 

Wood fiber prices are highest in the Northeast, where regional incentive programs 

played a key role in pushing up wood fiber prices in 2008 three times higher than 

the price for similar wood in the South, where there are far fewer incentive programs. Comparable wood is still typically 30 percent to 40 percent more expensive 

in the Northeast today. 

Inequitable incentive programs mean the same wood fuel used by paper mills and 

the same technology to burn it (biomass and biomass boilers) are treated differently 

than at stand-alone biomass plants, effectively undercutting pulp and paper energy 

production. Generating both electricity and heat through cogeneration—the most efficient means of wood energy recovery—at paper mills is given less encouragement 

than simple cycle plants. Stand-alone biomass plants selling electricity to third parties are eligible to receive more than 1¢ per kilowatt hour of production as an incentive, whereas pulp and paper producers receive no such benefit for use of the same 

biomass-based power in creating steam and electricity to make paper. 

The Green Energy Paper Manufacturing Act of 2009 (H.R. 4389) is a technologyneutral tax incentive program that provides a level playing field for the industry, 

and should be part of the government’s final package of green energy tax incentives. 

The coalition strongly supports this bill because it would provide a modest production tax credit of $4 per million BTU of energy derived from biomass fuels, on par 

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rent equivalent tax credits of $5.92 per million BTUs for ethanol; $6.15 for wind and 

$13.29 ($1.01 per gallon) for cellulosic ethanol. 

The bill calls for: 

• A production tax credit of $4 per MMBTU of energy derived from biomass fuels; • A cap of $25 million annually per facility, to limit costs to Treasury; • A requirement that mills reinvest 50% of the refundable credit in energy efficiency and environmental improvement projects. 

Providing this limited tax credit will assist a critical industry that provides high wages and good benefits. Pulp and papermaking employees earned an estimated $36 

billion in wages in 2008, or an average of about $70,000 a year in wage and benefit 

packages for jobs in mostly rural areas where similar employment is not readily 

available and the jobs are not easily replaceable. The industry is a major economic 

driver in the country, accounting for 6 percent of the U.S. manufacturing GDP, or 

approximately $200 billion in annual sales. 

While on par with the auto industry in terms of the sheer number of jobs and 

related benefits, the economic benefits of the pulp and paper industry are not concentrated in a single region but widely distributed geographically. The industry is 

a top-10 manufacturing employer in 48 states, and paper mills are among the largest school and municipal taxpayers and charitable contributors in the small communities where they operate. 

With nearly 1 million direct employees and up to 6 million additional indirect 

jobs, the forest products industry is a key American manufacturing sector, but it is 

facing increasing competition for its most essential raw material with power producers who can afford to pay more for biomass as a result of government tax credits 

and other subsidies. 

The Paper Industry Coalition to Save Energy and Main Street Jobs represents approximately 25,000 people in rural areas in more than 20 states from Maine to Florida to Washington state. With the industry’s job multiplier effect, that’s an additional 88,000 to 132,000 jobs that rely on the health of these paper companies in 

communities where sustainable and stable employment is elusive. This is why the 

United Steelworkers are standing with us to secure passage of this essential support 

for rural manufacturing jobs in the new Green Economy. 

We appreciate the opportunity to present these comments to the Committee, and 

look forward to working in partnership with the government to reduce foreign energy dependence through the use of green, renewable fuels, while solidifying an 

American manufacturing icon that supports rural communities and small towns 

across the country. 

Members and staff with an interest in learning more about this topic are encouraged to contact Mark L. Behan of Behan Communications Incorporated at 

mark.behan@behancom.com or at (518) 792–3856, or any of the following members 

of our coalition: 

Appleton Papers Old Town Fuel & Fiber 

(Appleton, WI) (Old Town, ME) 

Tom Ferree 920–991–8127 Dick Arnold 207–827–7711 

tferree@appletonideas.com dick.arnold@redshieldenv.com 

Boise Inc. Port Townsend Paper Corp. 

(Boise, ID) Eveleen Muehlethaler 360–379–2112 

Virginia Aulin 208–384–7837 eveleenm@ptpc.com 

VirginiaAulin@BoiseInc.com 

Buckeye Technologies Sappi Fine Paper North America 

(Memphis, TN) (Boston, MA) 

Dennis Livingston 901–320–8906 Amy Olson 617–423–5409 

Dennis_Livingston@bkitech.com Amy.Olson@sappi.com 

Domtar Stratex Energy 

(Fort Mill, SC) (Portland, ME) 

Tom Howard 803–802–8041 Gordon Grimes 207–228–7233 

thomas.howard@domtar.com ggrimes@stratexenergy.com 

Finch Paper LLC Thilmany Papers 

(Glens Falls, NY) (Kaukauna, WI) 

Adam Blumenthal 212–488–1341 Russ Wanke 920–766–8520 

adam@blue-wolf.com russ.wanke@thilmany.com 

Glatfelter Verso Paper Corp. 

(York, PA) (Memphis, TN) 

Mike Springer 717–225–2780 Mike Jackson 877–837–7606 

Michael.Springer@glatfelter.com mike.jackson1@versopaper.com 

Lincoln Paper and Tissue LLC 


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(Lincoln, ME) 

Keith Van Scotter 207–794–0601 

kvanscotter@lpandt.com 

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Plug Power Inc., Latham, New York, Statement 


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Plumbers and Pipefitters Local Union #589, Statement 


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Polyisocyanurate Insulation Manufacturers Association, Statement 


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Puget Sound Energy, Letter 


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Real Estate Roundtable, Statement 

Chairman Levin, Ranking Member Camp and Members of the Committee, The 

Real Estate Roundtable is pleased to provide this written statement for the record 

of the April 14, 2010 hearing on energy tax incentives driving the green jobs economy. 

The Real Estate Roundtable brings together leaders of the Nation’s top publiclyheld and privately-owned real estate ownership, development, lending and management firms with the leaders of major national real estate trade associations to jointly address key national policy issues relating to real estate and the overall economy. 

Collectively, Roundtable members’ portfolios contain over 5 billion square feet of office, retail and industrial properties valued at more than $1 trillion; over 1.5 million 

apartment units; and in excess of 1.3 million hotel rooms. Participating trade associations represent more than 1.5 million people involved in virtually every aspect 

of the real estate business. By identifying, analyzing and coordinating policy positions, The Roundtable’s business and trade association leaders seek to ensure a cohesive industry voice is heard by government officials and the public about real estate and its important role in the global economy. 

The Roundtable recognizes that commercial and multifamily building owners and 

managers, and their tenants and occupants, can play a significant role to reduce 

power costs and curb greenhouse gas emissions. The Energy Information Administration estimates that the commercial ‘‘end-use’’ sector accounts for 46 percent of 

building energy use (compared to 54 percent from the residential sector). See Table 

2.1a at http://www.eia.doe.gov/emeu/aer/consump.html. While commercial property 

owners can install high efficiency building components and mangers can ensure that 

systems operate for maximum effectiveness, The Roundtable must emphasize that 

occupant behavior in a building largely drives energy consumption. The majority of 

a building’s electricity use is associated with systems and equipment under the sole 

control of tenants and occupants, outside of the owners’ ability to manage, and not 

covered by building codes (e.g., tenant plug loads and usage of appliances, computers, tvs, etc.). Not all commercial and multifamily buildings have the same mixes 

of tenants; families use more electricity than households without children, and law 

firms and financial services companies generate greater demands for power than 

businesses operating on a more regular 9–5 schedule. To the same point, unique 

leasing arrangements between owners and tenants address issues such as payment 

of utility bills, sub-metering, individual unit thermostat controls, window opening, 

and a variety of other items affecting a building’s energy use. The Roundtable thus 

cautions against a ‘‘one size fits all’’ approach to regulate energy efficiency and 

power consumption in commercial and multifamily structures. We likewise emphasize that any program of federal financial incentives must be flexible enough to enVerDate Mar 15 2010 01:44 Feb 02, 2012 Jkt 063079 PO 00000 Frm 00460 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63079.XXX GPO1 PsN: 63079

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1 Building STAR legislation has been introduced in the Senate as S. 3079, and was discussed 

at a hearing of the Senate Energy and Natural Resources Committee on March 11, 2010. The 

Roundtable understands that introduction of companion legislation in the House is imminent. 

courage retrofits that make sense for varied building types, occupant behaviors, 

local and state regulations, and regional climatic conditions. 

I. Summary 

• Consider Short-Term and Fast Acting Rebates for Commercial Building Energy Retrofits. To immediately create green jobs in the energy efficiency arena, shorter-term non-tax incentives can provide a bridge to longerterm tax incentives. The Committee should consider the positive interactions 

between the rebate program for commercial building retrofits as proposed by 

S. 3079 (companion legislation is expected to be introduced in the House 

shortly), and the performance-based tax deduction for energy efficient commercial buildings in section 179D of the Internal Revenue Code. • Improve the Existing Energy Efficient Commercial Building Tax Deduction. To date, the 179D commercial building tax deduction has not been 

widely used by the real estate sector (except for the partial allowance for 

lighting upgrades). This is because the whole-building performance standard 

is too expensive to meet given current costs, technologies and computer modeling. Also, the deduction has not been effectively administered to date by the 

Internal Revenue Service and the Department of Energy. The Roundtable 

thus supports H.R. 4226, which would increase the allowable amounts of the 

available deduction, and re-open processes that can make it easier for building owners and managers to use this incentive. • Allow Real Estate Investment Trusts (REITs) to Fully Use Green Incentives. Statutory requirements that REITs must pay dividends to shareholders 

largely eliminate any taxable income that REITs may hold. Thus, Congress 

should enact measures like H.R. 4256 and H.R. 4599, so that REITs may seek 

grants in lieu of energy efficiency tax credits and fully utilize green incentives 

for energy efficiency and renewable energy. • Enact Component-Specific Tax Incentives. Meaningful tax incentives to 

replace aging roofs and chillers can go a long way to make commercial buildings more energy efficient. The Committee should therefore combine the accelerated depreciation and efficiency standards of H.R. 426 and H.R. 2615 

with regard to above-deck insulation for low-slope roofs, and section 4 of H.R. 

4455 to encourage change-out of older and environmentally damaging chillers. 

II. Synergies between Building STAR rebates and green tax incentives. 

The Roundtable supports financial incentives designed to spur energy efficiency 

retrofits in commercial and multifamily buildings. The Pew Center on Climate 

Change released a recent report confirming that leading companies are more committed than ever to achieve energy savings. However, corporate officers cite lack of 

funds and financing—especially due to the recession and frozen lending markets— 

as the single greatest impediment for capital investments in energy efficiency. See 

http://www.pewclimate.org/press-release/corporate-energy-efficiency/03–31–10. Accordingly, The Roundtable recommends that a full suite of incentive measures must 

be explored so building owners have the financial means to deploy code-stretching 

energy efficiency technologies. Encouraging building retrofit projects will have myriad positive effects in creating manufacturing, construction, and installation jobs; reducing electricity bills; lowering greenhouse gas emissions; and ensuring that the 

United States is at the fore of technology and innovation. 

The Roundtable thus encourages the Committee to address the broader relationship of both tax and non-tax green incentives. Specifically, the Committee should 

consider the interaction between the energy efficient commercial building tax deduction at 26 U.S.C. § 179D of the Internal Revenue Code, and the rebate incentives 

offered by ‘‘The Building Star Energy Efficiency Incentives Act.’’ 1 Building STAR’s 

jobs creation, energy savings, and environmental benefits, and its diverse endorser 

list, are available at http://www.energyfuturecoalition.org/content/Building-STAR. The Roundtable submits that the 179D tax deduction cannot be fully realized without Building STAR’s complementary energy efficiency rebates. 

Section 179D currently allows a tax deduction of $1.80 per square foot of commercial building area upon the installation of certain energy efficient systems. Building 

STAR is not a tax incentive, but proposes a federal rebate program that leverages 

private capital to cover about 1⁄4 to 1⁄3 of the cost for an energy efficiency retrofit 

project in commercial buildings. Both the 179D tax and Building STAR incentives 

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far as it offers rebates for more types of energy efficient equipment, materials, and 

services beyond the scope of the 179D tax deduction. 

Building STAR rebates are intended to be a short-term stimulus and jobs creation 

measure to expire at the end of 2011. It will create more than 150,000 jobs and put 

laborers in the hard-hit construction industry—where 25 percent of the workforce 

is unemployed—back to work. In contrast, the existing 179D tax deduction is longer 

lasting and has been extended through the end of 2013. This distinction is reflected 

in the fact that the maximum 179D tax deduction depends on a building’s energy 

performance, while Building STAR is a fast-acting prescriptive-based program. 

Building STAR’s prescriptive approach would offer rebates for a pre-qualified list of 

high efficiency components and services for a building upgrade project. On the other 

hand, section 179D’s maximum allowable deduction of $1.80 per square foot of building area depends on a showing that the building has attained and sustains major 

improvements to its energy efficiency performance. The full $1.80 tax deduction is 

available for both new and existing commercial buildings in which the installation 

of interior lighting, HVAC, and envelope systems reduce the building’s total annual 

energy and power costs by 50 percent or more, compared to minimum requirements 

of the ASHRAE 90.1 (2001) standard as in effect on April 1, 2003. In short, only 

a property with a 50 percent increase in its energy performance can use the maximum $1.80 per square foot deduction. To prove this performance level has been 

met, a building owner must hire accountants and efficiency experts to conduct complex computations that require computer modeling. Such calculations of energy and 

power usage and costs are expensive and time consuming. 

In the experience of The Roundtable’s members, and given current technologies, 

the 50 percent performance level is too costly to achieve. As a result, the 179D maximum tax deduction has been rarely (if ever) utilized by commercial building owners. Indeed, the team that spearheaded the energy efficiency upgrade of the Empire 

State Building (ESB)—considered by many to be the gold standard of building retrofits—took a whole-building approach to modernize lighting, windows, chillers, and 

other components. The team determined that at current costs the ESB could effectively reduce energy use by 38%. See http://www.esbsustainability.com/SocMe/ 

?Id=0. The ESB case study helps explain why section 179D has not proved to be 

a meaningful tax incentive to date. Simply put, the 179D deduction’s 50 percent performance requirement relative to ASHRAE 90.1 (2001) is beyond reach. 

This brings us back to Building STAR. The Roundtable submits that the maximum 179D deduction will remain unutilized unless incentives are also provided to 

assist building owners underwrite the steep up-front costs to install new lighting, 

envelope, and HVAC systems that are prerequisites to greater energy efficiency. 

Moreover, Building STAR rebates for web-based energy management controls and 

proper personnel training will go a long way to encourage integrated operation of 

building systems, to achieve higher levels of energy efficiency performance as contemplated by section 179D. 

The Roundtable does not believe that the existing 179D tax deduction alone will 

incent building owners to recoup the returns on investments they need to make the 

business justification for energy efficiency upgrades. We thus encourage the Committee to endorse Building STAR, in light of the synergies that rebates would create 

with the 179D tax incentive. 

III. Improvements to the existing 179D tax deduction. 

Aside from the jobs, energy, and environmental gains that can be had through the 

interaction of Building STAR rebates and tax incentives, The Roundtable encourages the Committee to support improvements to the existing section 179D tax deduction. 

A. We recommend enlarging the existing amounts for the deduction as proposed 

by H.R. 4226, the ‘‘Expanding Building Efficiency Incentives Act.’’ H.R. 4226 would 

increase the maximum deduction for building performance (tied to the 50 percent 

efficiency improvement relative to ASHRAE 90.1 (2001)) from $1.80 per square foot 

to $3.00 per square foot. Moreover, H.R. 4226 would change amounts for partial allowances regarding specific building systems that meet section 179D’s energy-savings targets. It would increase the partial allowance for the upgrade of an individual 

system (that is, interior lighting, HVAC, or envelope) from $.60 per square foot up 

to $1.00 per square foot; and create a new partial allowance of $2.20 per square foot 

for more expensive upgrades of HVAC and envelope systems. 

The Roundtable supports these increases. While our members have found the 

50%-building performance standard too high to claim the maximum deduction, the 

partial deduction (particularly for interior lighting upgrades) has been more successful. If a building owner cannot satisfy the overall 50 percent energy reduction standard but can retrofit one of the three building systems to lower energy and power 


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costs by 162⁄3%, then the cost of that particular subsystem improvement qualifies 

for the partial allowance. Increasing the amounts for the whole and partial deductions will encourage building owners to undertake energy efficiency retrofit projects 

and can help them achieve quicker returns on their capital investments. 

B. The Roundtable also recommends certain administrative changes to make the 

energy efficient commercial building deduction more useable. Congress should direct 

the IRS to change the existing guidance on section 179D to provide needed detail 

and simplify needlessly burdensome requirements. Specific areas for improvement 

include: 

• As the IRS has done with the similar new homes tax credit, it should provide 

technical guidance for computing projected energy savings based on the California Alternative Calculation Method (ACM) manual, which is widely understood and also mentioned as a reference for calculation procedures in the text 

of section 179D itself. 

• To eliminate confusion and potential abuse of the tax deduction, the IRS 

should provide uniform regional energy cost assumptions for use in estimating building energy savings. 

• As required by the ACM manual, the IRS should require that modeling software automatically generate the ‘‘reference’’ building against which energy 

savings are measured. Such software would save considerable time and effort 

for potential applicants claiming the deduction. 

• Congress should direct the IRS to produce a form to provide taxpayers with 

greater certainty (and documentation in the case of an audit), and to provide 

the IRS with more information on the use of the deduction. Currently, the 

179D deduction is claimed on the generic ‘‘Other Deductions’’ line of a tax return and there is no special form for computing the deduction. Without forms, 

the IRS also has no clear way of tracking how many taxpayers have claimed 

the deduction and for what amount. 

• IRS guidance for the partial tax deduction (for individual lighting, HVAC, 

water heating, or envelope systems) should be more specific instead of requiring costly software modeling. 

In conclusion, The Roundtable recommends those substantive and procedural 

changes specific to section 179D, discussed above, in an effort to make the energy 

efficient commercial tax deduction a more meaningful incentive for building owners 

and managers. 

IV. Green tax issues for real estate investment trusts (REITs). 

The Roundtable supports legislative proposals that would allow REITs to take full 

advantage of green tax incentives. For example, H.R. 4256, the ‘‘Sustainable Property Grants Act,’’ would allow REITs to be fully eligible for energy grants authorized 

by the American Recovery and Reinvestment Act (ARRA). Through H.R. 4256, 

REITs could take advantage of such stimulus programs without a limitation based 

on their statutorily mandated payment of taxable income as dividends to shareholders. 

Recognizing that the current economic downturn would likely limit many taxpayers from producing adequate taxable liability, ARRA authorized the use of energy grants in lieu of tax credits through 2010, for companies that invest in renewable energy projects that would qualify for the tax credits. Despite being designed 

for this purpose, the energy grants provision in ARRA has been interpreted to limit 

any direct benefit to a REIT. H.R. 4256 would amend ARRA to specifically allow 

REITs to fully engage in renewable energy projects, such as installation of solar 

panels on rooftops, fuel cells, small wind, combined heat and power, and geothermal 

systems. 

Similarly, The Roundtable supports H.R. 4599, the ‘‘Renewable Energy Expansion 

Act,’’ which would provide taxpayers an option to receive a tax credit or grant for 

investing in or producing renewable energy. The bill would extend the ARRA renewable energy program through the end of 2012, and give REITs and other companies 

an opportunity to elect grants in lieu of energy tax credits. 

V. Component-specific tax incentives. 

A. Green roofs. 

The Roundtable supports a proposal of the Polyisocyanurate Insulation Manufacturers Association (PIMA) and the National Roofing Contractors Association (NRCA) 

to combine two separate roof-specific tax incentives: the accelerated depreciation allowed by the ‘‘Green Roofing Energy Efficiency Tax Act’’ (H.R. 426), and the efficiency requirements of the ‘‘Energy-Efficient Commercial Roofs Act’’ (H.R. 2615). 


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Combining these measures would encourage the installation of more energy efficient roofs on buildings. The PIMA/NRCA proposal would provide an accelerated 20- 

year depreciation period (instead of 39 years) for commercial roofs that meet certain 

R-values, a measure of the effectiveness of thermal insulation. The R-values as prescribed in the proposal are more stringent than what is currently required under 

most state and local building energy codes. The proposal would be limited to upgrades of existing building roofs in 2010 and 2011, and would only apply to lowslope roofs where the installation is entirely above deck. 

B. Chillers. 

The Roundtable also supports a tax credit for the replacement of older chillers, 

such as that proposed by Section 4 of H.R. 4455, the ‘‘Expanding Industrial Energy 

Efficiency Incentives Act.’’ 

Large, water-cooled chillers are the ‘‘engines’’ of the air conditioning systems for 

almost all large buildings. Prior to 1993, chlorofluorocarbons (CFCs) were the refrigerants used in chillers; CFCs have since been banned in new systems because they 

contribute to ozone depletion. Yet, the Air-Conditioning, Heating and Refrigeration 

Institute (AHRI) estimates that as many as 30,000 CFC-based chillers remain in operation in public and private buildings across the country. This is largely due to the 

significant cost associated with the removal of old systems and the purchase of 

newer, more efficient ones. A chiller-specific tax credit can encourage building owners to remove from service older, more environmentally harmful chillers with CFC 

refrigerant. Also, a chiller tax credit would save electricity, as new chillers are on 

average up to 60 percent more efficient than those they would replace. A tax credit 

of $150 per ton of cooling capacity of the unit being replaced would be a reasonable 

incentive for building owners to replace their old systems. 

In conclusion, The Real Estate Roundtable appreciates this opportunity to provide 

our perspectives. We look forward to continue assisting the Committee in examining 

tax and other financial incentives to generate jobs and drive the new energy economy. 

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Renewable Energy Group, Letter 

April 14, 2010 

The Honorable Sander Levin, Chairman 

Committee on Ways & Means 

U.S. House of Representatives 

1102 Longworth House Office Building 

Washhington, DC 20515 

Dear Chairman Levin, 

America’s biodiesel industry has been hit hard and is nearing collapse if the biodiesel blender’s tax credit is not reinstated and made retroactive before the Memorial Day Congressional recess. Further delays are causing a backslide on our national goal of energy security. 

As the Chairman and Chief Executive Officer of Renewable Energy Group®—the 

largest biodiesel producer in North America—and an active Member of the National 

Biodiesel Board—our industry’s non-profit trade association—I cannot emphasize 

enough the urgency of this matter. 

As you know, the first entity to blend biodiesel with petroleum diesel is credited 

$1.00/gallon. These blenders typically include major petroleum distributors, regional 

jobbers and retail fuel locations such a truck stops. Due to the continued delay in 

the tax credit, these customers are no longer willing to risk purchasing biodiesel 

without knowing when the credit will be applied back. Therefore, biodiesel sales 

in the U.S. have plummeted since the January 1 tax credit lapse. 

On April 12, associations representing nearly all of our downstream supply chain 

partners in a letter urged Senators Baucus and Grassley to continue their work to 

reinstate and make retroactive the biodiesel blenders tax credit. National Association of Convenience Stores (NACS), the Petroleum Marketers Association of America 

(PMAA), the Society of Indendent Gasoline Marketers of America (SIGMA) and the 

National Association of Truck Stop Operators (NATSO) sent the combined letter because ‘‘ . . . el retailers want to continue making investments in biodiesel infrastructure and want to continue selling biodiesel to customers.’’ 

Due to the lapse in downstream supply chain demand, many biodiesel manufacturers around the country immediately idled their facilities on Jan. 1, 2010. Today— 


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104 days later—those manufacturers that are able to hang on; are facing imminent 

layoffs and significant investments losses for thousands of small, local shareholders. 

This represents 23,000 jobs that are currently supported by the domestic 

biodiesel industry that will be added to the unemployment rolls if the tax 

credit is not quickly reinstated. 

Today, our industry financials sit at a critical threshold; continued delays in the 

tax credit could push our businesses across the line of no return. Future biodiesel 

projects that will continue to advance our industry and our Nation’s energy goals 

are on indefinite ‘‘hold’’ until the certainty of our industry is in place with the reinstatement of the tax credit. 

The REG Network, including wholly-owned and independent biodiesel plants in 

Iowa, has laid off 45 percent of its workforce and forced pay cuts. This has resulted 

in more than $555,000 in lost wages for green collar biodiesel employees in the REG 

network first-quarter alone. 

Further, our upstream supply partners and vendors are experiencing reduced 

sales as our plants idle and stop purchasing raw materials. Global Ethanol in Riga, 

Michigan invested in corn oil extraction technology in order to supply inedible corn 

oil feedstock to biodiesel companies like REG. Due to biodiesel industry idling, demand for their inedible corn oil has been limited. 

The biodiesel tax credit is currently within the Extenders Package (H.R. 4213) 

which is part of the second jobs bill, the American Workers, State, and Business Relief Act. This bill was passed by the Senate March 10th and is currently awaiting 

action. 

We know the countless issues you address each day deserve your attention and 

I know you work tirelessly to address each one; however, ours is increasingly becoming critical for our survival. We appreciate this work and humbly ask that you not 

let up. 

Sincerely, 

Jeff Stroburg, Chief Executive Officer 

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Renewable Energy Group, Incorporated 


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Renewable Fuels Association, Statement 


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Written Testimony of Jonathan Davis, President of SEMI North America 

Chairman Levin, Ranking Member Camp, thank you for allowing me to submit 

testimony to the Committee on Ways and Means regarding energy tax policy. 

My name is Jonathan Davis and I serve as the President of North America for 

Semiconductor Equipment and Materials International (SEMI). Although we are a 

global organization, SEMI represents about 425 U.S. companies in the $50 billion 

worldwide semiconductor equipment and materials industries. These companies supply the enabling technologies, including raw materials and advanced tools, to 

produce every semiconductor-based product from cell phones to computers. 

In addition to these products, our members also provide a base for emerging technologies such as solar photovoltaic (PV) and nanotechnology, including solid state 

lighting (SSL). That is why in 2008 SEMI members involved in solar energy/PV 

manufacturing formed the SEMI PV Group to address the opportunities and obstacles of bringing low-cost PV technology and sustainable clean energy to the world. 

As such, it is with our members concerns in the solar and energy efficiency industry 

that I submit these comments to you today. 


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SEMI and our members were pleased with the alternative energy investment sections of the American Recovery and Reinvestment Act (ARRA), and in particular 

with the Advanced Energy Manufacturing Tax Credit (MTC) and the Section 1603 

payments in lieu of tax credit program as applied to the Investment Tax Credit 

(ITC). Both of these programs go a long way in helping to establish a more substantial base for domestic production of solar panels, and in helping consumers offset 

the cost of installing solar panels in their homes. The end result of both more manufacturing capacity and more installations is, of course, more jobs, cleaner electricity, 

and less dependence on foreign sources of energy. In fact, solar PV creates more jobs 

per installed megawatt (MW) than any other competitive renewable energy source. 

So, how do we ensure that these programs are iving up to their full potential and 

creating the most jobs possible? 

When it comes to the MTC, there can be no doubt of the popularity of this program within the manufacturing community. Although ARRA capped the program at 

$2.3 billion, the Treasury received over $8 billion in eligible applications. This excess need represents thousands of jobs that could be produced, and many more billions of dollars in private investment left out of the economy. While some SEMI 

member companies were fortunate to receive the MTC, others were shut out, with 

a great deal of disappointment and lost opportunity. At this point in our Nation’s 

economic recovery, it is imperative that we have an ‘‘all hands on deck’’ approach, 

and that is why SEMI advocates for the removal of the cap on the MTC. 

Removing the cap will allow billions upon billions of dollars of private investment 

to leverage this tax credit and build up America’s renewable energy manufacturing 

base. A recent report by he Pew Charitable Trust revealed that while the U.S. was 

number two globally in total investment in renewable energy technology at $18.6 

billion in 2009, we are a distant second to China which invested almost double that 

amount ($34.6 billion). We need to close this gap, and quickly, if we are going to 

be competitive in the race to improve, manufacture, and install renewable energy 

sources. This will have an impact not only on those companies that produce solar 

panels, but also will increase investment and job creation across the supply chain, 

including equipment makers and material providers. 

Although solar PV technology was created here in the United States, our share 

of the global manufacturing capacity is only 6%, or .5 gigawatts (GW). Simply put, 

it’s not enough capacity to meet even our domestic demand for solar PV. (i) According to estimates, the U.S. will install twice as much solar PV in 2010 than we have 

the capacity to produce, and the demand only continues to grow from there. (ii) By 

2016, it is estimated that the U.S. will install 6 GW, or twelve times the current 

capacity of our domestic production. (iii) If the jobs to meet this demand aren’t in 

the America, that’s a lost opportunity of over 80,000 jobs. 

In addition to solar PV, SEMI members are increasingly ramping up efforts to 

bring lower cost, high efficiency solid state lighting (SSL) to the American consumer. 

The Department of Energy (DOE) expects SSL to completely displace all other technologies in commercial, residential, industrial and outdoor segments by 2030. They 

estimate this will save 1,488 terawatt-hours of energy representing a savings of 

$120 billion at today’s energy prices. 

The real challenge in making this happen, however, is being able to increase our 

domestic manufacturing capacity for SSL technologies, such as light emitting diodes 

(LED’s). Again, by removing the cap on the MTC, our members would be able to 

leverage this tax credit to pour billions of dollars of private investment into increased produced of LED’s, lowering the price, and greatly helping to reduce the 

amount of electricity we use for lighting. While our members are grateful for those 

MTC that LED companies received as part of ARRA, there is still plenty of unmet 

need in developing our domestic manufacturing capability in this area. 

In addition to building up our manufacturing base, solar PV also needs to be price 

competitive in order to reach a sustainable level of deployment in the United States. 

While the ITC program has been a good driver, under the current economic circumstances SEMI believes that it is vital to continue the Section 1603 grants in lieu 

of credit program to provide the necessary up front capital for installation of renewable energy technologies. 

With this program set to expire at the end of 2010, we are quickly approaching 

a cliff that will severely hamper the growth in solar PV installations. It is SEMI’s 

belief that the Section 1603 program should be extended to 2012, which will allow 

continued growth, while providing sorely needed upfront capital for solar installation projects. It would be an unfortunate mistake to cut this successful program out 

at the knees, before it has a chance to make its full impact in the creation of jobs 

in our country. The current 2010 expiration date doesn’t allow for a long enough 

time period for this provision to have the maximum impact on creating more renewable energy projects. By extending this program for an additional 2 years, more 


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large scale renewable energy projects will be ready to begin construction and take 

full advantage of the program. 

Mr. Chairman and Ranking Member, again I thank you for allowing SEMI to submit this testimony, and I hope you will consider our requests. SEMI member companies are very proud of their contributions to the American economy, and we hope 

to be able to work closely with this committee as it continues to work on policies 

that support the growth of the renewable energy here in the United States. 

f 

Solar Energy Industries Association, Statement 


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U.S. Green Building Council, Statement 


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U.S. Fuel Cell Council, Statement 


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United Solar Ovonic, LLC, a Subsidiary of Energy 

Conversion Devices, Incorporated, Statement 


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Windustry, Letter 


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Æ 


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